*vV<
W*
'•i^ . t
<&*
71
THE
PRESENT STATE
OF
.
LONDON :
Printed by A. & R. Spottiswoodc,
New- Street- Square.
THE
PRESENT STATE
OF
OEnglanfc
IN REGARD TO
AGRICULTURE, TRADE, AND
FINANCE;
WITH
A COMPARISON OF THE PROSPECTS OF
ENGLAND AND FRANCE.
BY JOSEPH LOWE, ESQ.
/"• /' 1 .
-^o-7
LONDON:
PRINTED FOR LONGMAN, HURST, REES, ORME, AND BROWN,
PATERNOSTER-HOW; AND
J. RICHARDSON, 91. ROYAL EXCHANGE.
1822.
* <*)7
AiviAjijvia TO
TO
WILLIAM MANNING, Esg. M.P.
AND A DIRECTOR OF THE BANK OF ENGLAND,
THIS VOLUME,
APPROPRIATED TO OBJECTS INTIMATELY CONNECTED
WITH THOSE OF HIS PUBLIC LIFE,
IS RESPECTFULLY INSCRIBED,
BY
THE AUTHOR.
A 3
INTRODUCTION.
JVo subject can present a higher interest than an
inquiry into the state and prospects of the produc-
tive industry of England. Whatever has a ten-
dency to correct error, or introduce improvement
into the operation of that industry, affects the
comfort of so large a population, that no research,
bestowed on such a subject, can be accounted too
minute, no labour too long.
Fruitful as has been the present age in changes,
military and political, there has prevailed an almost
equal degree of revolution in the value of money
and the productive power of labour and capital, de-
partments in general so tranquil as hardly to attract
the notice of the historian. Those of our readers
who are of an age to recollect the peace of 1783,
cannot have forgotten the general discouragement
caused by the relinquishment of our American
Colonies, followed as it was by a season of great
financial difficulty. They will remember with more
satisfaction the revival of our commercial activity
in the years preceding the French Revolution,
and the discussions whether we were indebted for
A 4
Vlll INTRODUCTION.
the change to the course of circumstances or the
conduct of the minister. This was followed by the
war with France — a period subversive of all pre-
vious calculation in finance, since, after experienc-
ing pecuniary difficulty in the early years of the
contest, our resources appeared to expand with
onr wants, and continued so long abundant, that
we had some difficulty in anticipating the possi-
bility of a recurrence of embarrassment.
That which took place after the close of the war
was accounted temporary, and the public, unwilling
to connect the idea of distress witli results so gra-
tifying in a political view, clung to the expectation
that their distress wonld disappear as soon as peace
should be firmly established. This hope was con-
firmed by the revival of our national industry in 1817
and 1818, but the succeeding years dispelled the
illusion, and taught us that the evils of transition
were not yet at an end.
During the last and present year circumstances
have become more favourable, and our lower orders
in particular, enjoy a larger share of comfort than
they have known for a long period; but the unfortu-
nate coincidence between that comfort and the dis-
tress of our agriculturists, joined to the portion of
uncertainty always attached to a commerce of ex-
port, convey a warning that a season of difficulty
must yet elapse, ere our circumstances become
thoroughly adapted to our new and more natural
state. The whole affords a painful lesson how little
either the public or our rulers foresaw the conse-
quences of lavish expenditure, and how few among
those who undertook to enlighten them, either in
INTRODUCTION. IX
parliament, or through the medium of the press,
had made an acquaintance with historical truths
the basis of their conclusions.
To elucidate, by a careful survey of facts and
documents, the obscurities of the past, and to
offer suggestions which may perhaps have a
tendency to lessen existing inequalities, and fa-
cilitate our gradual transition to a more safe and
steady state of things, is the object of this volume.
We shall begin by endeavouring to account
for our financial prosperity during the war, and
to explain the causes of the reverse that fol-
lowed the peace. No one has yet attempted to
show how far our increase of wealth during the
war was real, and how far nominal — a distinction,
which, if subversive of the flattering picture with
which we gratified our imagination during our
long contest, has the consoling accompaniment,
that the decrease of our wealth since the peace will
be found, by following up a similar reasoning, to be
considerably less than is commonly apprehended.
This inquiry will be necessarily connected with
researches into the intricate topics of Money and
Exchange. How far did the substitution of paper
for metallic currency prove an addition to our
resources? At what period did that hazardous
experiment cease to afford relief, or become pro-
ductive of loss ? And do not the public at present
labour under a general misapprehension in regard
to the effect of the resumption of cash payments,
attributing to the act of 1819, commonly called
Mr. Peel's Bill, that fall of prices, that recovery
X INTRODUCTION.
of the value of money which ought to be traced to
a more powerful cause ?
Our next topic shall be the state of our Agri-
culture, and the causes of the calamity that has
overtaken this, the most flourishing during the war
of all the branches of our industry. Here also, the
attentive inquirer will find much miscalculation to
correct and misapprehension to remove. In at-
tempting this we shall draw a comparison of the
charges attendant on British and Continental agri-
culture, and venture on the more difficult in-
quiry how far our produce is likely to continue
at a reduced price ; also how far such reduction is
or is not conducive to national prosperity.
A more cheering theme will be opened to us
by the increase of our population, the adequacy
of our produce for its support, and the refutation
of the discouraging theories circulated on this
subject during the war. An intimate connexion
evidently prevails between the increase of our
numbers and the increase of our national wealth,
whether, with some sanguine calculators, we con-
sider the former the cause, or merely the accom-
paniment and index of the latter.
These and collateral topics will occupy tliq greater
part of our volume : the remainder shall be ap-
propriated to the discussion of propositions for the
relief of our suffering classes, founded, partly on
the evident tendency of our resources to increase,
partly on a plan of aiding individuals to correct
the existing disproportion in wages, salaries, and
other contracts formed when money was of far less
power in the purchase of commodities.
INTRODUCTION. XI
If our outline appear to embrace too great a
variety, we may add that our plan has been to
give a continued attention to inquiries which have
been taken up by others only at intervals, and to
aim at conclusions which separate and unconnected
discussions can never suggest.
To objects such as these any attachment to party
politics would evidently be unsuited. A writer
thoroughly impressed with the importance of his
subject, and animated by the hope of rendering
service to his countrymen, will consider as a
secondary object the notice either of men in office
or their opponents. While he speaks with commen-
dation of measures, which bear the stamp of good
intention or laborious exertion, he will animadvert
without reserve on such as are indicative of hasty
or imperfect views. It is on this ground, far more
than on deficiency of zeal for the general good, that
our public men are vulnerable. " In retirement,"
said an eminent public character, " I became
sensible that when in place I had been deficient
in almost every thing but diligence."* The func-
tions of our heads of office are often ill distributed :
the assistance afforded them in the higher and more
difficult departments is apparently very imper-
fect ; and their minds, engaged from day to day
in devising expedients to meet a temporary ur-
gency, become less and less accustomed to long
continued reflexion on one subject, and to the con-
clusions for which such reflexion is indispensable.
Without an admission of this nature, how can we
* Huskisson on the Bullion Question, 1809
Xll INTRODUCTION,
explain the change in their views during the last ses-
sion, in regard to taxation and the relief of the agri-
culturists ; or the more serious charge of delaying
till the present time the adoption of a decisive
course in regard to Ireland ; or, finally, their post-
poning in this country, till the eighth year after
the war, the introduction of ^financial measures
adapted to a state of peace ?
An equal disposition to impartiality will, it is
hoped, be traced when we carry our views abroad
and speak either of that nation which hereditary
feeling still represents as our rival in Europe, or of
that which contests of recent date have brought for-
ward as our opponent on the opposite shore of the
Atlantic. A personal residence of several years in
France has given the author an occasion to mark
the national character, to study the political re-
sources, to calculate the prospective power of our
once dreaded neighbour. It has satisfied him
that though France is still the greatest of conti-
nental states, yet that England may soon dismiss
the apprehensions entertained by our forefathers,
and rest tranquil in the assurance of the more rapid
increase of her population, wealth, and power.
The reader who thinks this too confident a con-
clusion, may be referred for a confirmation of
such views to the conduct of our ministers, who,
when France was in a manner at the disposal of this
country and of allies ready to join in any project of
partition, accounted it impolitic either to weaken
her frontiers by the retention of fortresses, or
to cripple her trade by the imposition of restric-
tions. We are no longer, therefore, in the situation
INTRODUCTION. X11L
of a people in hazard of attack, obliged to seek
security in alliances, or to postpone the correction
of domestic abuses from a dread of exciting dis-
union. The most sincere well-wisher to his
country may speak with freedom of past trans-
actions, viewing them merely as facts in history,
— as events, which though not remote in date, may
be boldly scrutinized without any prejudicial effect
on our present situation.
The disposition of the public is fortunately in
coincidence with this state of things. During the
war events followed in too quick succession to ad-
mit of deliberate reflexion, or to afford a basis for
instructive conclusions : — all was absorbed in the
bustle of action, in an expectation of change. At
present the public may be compared to those who,
retired from active life, pass their transactions in re-
view with the advantage of leisure and experience,
— a situation far more favourable than the ardour
of a contest, for appreciating both the extent of
our sacrifices, and the results of which they were
productive.
.
CONTENTS.
CHAPTER I.
The late Wars ; the Expenditure caused by them, and tlic
Sources from which it was supplied.
Page
Sketch of military events from 1793 to 1801 - 1
Our situation at the peace of Amiens 9
War of 1803 - 10
Alternations of success - - 15
Expenditure during the war; its progressive increase - 17
How far defrayed by loans, how far by taxes - 22
Comparison with former wars - 23
What were the sources of these great supplies? - 24«
Was it our foreign trade ? 25
Was it our colonial acquisitions ; the suspension of fo-
reign competition ; the extension of our bank paper ? 27
All these means over-rated ; the chief source of our
supplies, was the augmented employment attendant
on the war - - 29
How was government enabled to pay for this augmented
employment? — Chiefly by the expenditure of bor-
rowed money - - - 33
General rise of prices - 34?
Absence of foreign competition - - - 35
Proportion, at different dates, of our burdens to our re-
sources ......... 37
CHAPTER II.
General Rise of Prices during the War.
The causes specified - 43
The demand of men for government service - 44
Proportion of the force in arms, to the population at
large .- - - - - 45
XVI CONTENTS.
Page
Taxation, its effect on prices - 46
Fluctuation of money prices, exemplified in land, houses,
and merchandize - - - - - 48
Fluctuation of an opposite kind in the funds and other
money property - - - 49
Injurious effect of rise of prices, when greater in one
country than in others ; opinions of Mr. Gray and of
Mr. Ricardo ... - 50
Prices on the continent during the present age ; France 52
The Netherlands, Austria, and other countries 53
Rise of prices apparently indicative of prosperity - 56
Its effect on our public burdens - 58
Summary of the fluctuations of money in the present
age - 59
CHAPTER III.
Consequences of the War exemplified since our Transition
to Peace.
Magnitude of the distress since the peace - 61
Caused less by diminished resources, than by a sudden
and general change - - - 63
Computation of the reductions of our income, national
and individual - 64
The degree of reduction in different classes - 69
Effect on our public debt, of the late rise in the value
of money ------ 71
Have our public men understood our financial situation? 74
Mr. Pitt 75
The successors of Mr. Pitt - - 77
The Opposition - - . - 79
CHAPTER IV.
Our Currency and Exchanges since 1792.
Historical sketch of our Exchanges since 1792 80
Tabular statement of our corn imports and subsidies - 91
Our money system previous to 1 797 - 96
The Bank Restriction Act 99
Effects of that Act in augmenting the disposable funds
of bankers, facilitating discounts, and preventing the
rise of interest - — - « 101
CONTENTS. Xvii
Page
The questions of depreciation and over-issue.
Depreciation of our currency on the Continent - 101
Consequent depreciation at home - 10.3
The degree of such depreciation, and consequent in-
crease of our bank-paper - - - 106
Arguments against carrying farther the charge of over-
issue ... . jQ7
An excess in discounts productive less of over-issue than
of loss to bankers - - 109
Proof of the existence of depreciation - - 111
Would the exemption from cash payments, if not re-
sorted to in 1797, have been adopted at a subse-
quent period? . 112
How far was it a source of financial aid ? - 1 14*
CHAPTER V.
Our Agriculture.
SECTION I.
Historical Sketch.
Our Corn trade, prices to the revolution of 1688 - 117
Bounty on export in 1689 - 118
Uniformity of prices in the reign of George II.; rise
after 1764? - 120
Act of 1773 - 121
The late Wars - 122
The peace of 1814 - 124
Fluctuations since 1792, divided into periods - id.
Causes of these fluctuations : the effect of our Corn
laws greatly over-rated - - - - 131
Causes of rise during the war - - 132
Causes of fall since the peace - 134
Additional hands now employed in tillage - 135
SECTION II.
Situation and Prospects of our Agriculturists.
Annual produce and rental of Great Britain and Ireland 137
Magnitude of the depression since the peace - - 138
Present situation of our landlords and farmers - - 140
Consequence of a general reduction of fanning charges 143
Comparison of our present prices with those prior to
1793 ...... 145
XV1H CONTEXTS.
Page
Effect on the price of corn of increasing population - 146
Effect of a bad season - - - - 149
Prices less fluctuating in peace than in war - - 150
Effect of the market price of corn on the cost of its pro-
duction ...... 152
Prospect of prices ; •— Circumstances conducive to a rise 155
Circumstances which render a low price probable - 158
Prospect of relief to farmers - - - 160
SECTION III.
A protecting Duty.
A populous country not necessarily expensive - 163
Comparative burdens on French and British agriculture 165
Are our manufactures benefited by protecting duties? - 170
Danger of an over-extension of tillage - 173
Tendency of our legislation to ultimate freedom of trade 177
Advantages of such freedom - - 179
Obstacles to it in our present situation - 180
CHAPTER VI.
Poor-rate.
Origin of our Poor law system - 182
Its progressive extension - 184
Workhouses - - 189
Management of the poor in Scotland and France - 190
Poor-rate considered as a tax - - 193
Is our poor law system beneficial to the lower orders? - 199
Repeal of taxes on the necessaries of life - 203
CHAPTER VII.
Population.
Penury of early ages - ... 208
Effect of increasing population - - id.
Is the amount of subsistence limited by physical causes ? 21 1
Comparison of the present with former periods - 214
Leading ideas of Mr. Malthus and Mr. S. Gray - 216
Progressive increase of population in Europe ; — effects
of climate and soil - - - - 218
CONTENTS. XIX
Effect of easy communication - - - 219
Effect of the Protestant Religion - 220
Population per square mile; Holland and England - 221
Austria, Prussia, and Poland ; France - - 223
Ireland ; Italy ; Spain ; - 225
Effect of increase of population on national wealth - 227
Its effect on the wealth of individuals ... 228
Comparison of public burdens in different parts of Eu-
rope .... - 230
The case of Ireland, Naples, Lombardy - 231
Wealth of town population - 232
Subsistence more easy of acquisition as society advances 234
Prospect of Europe in regard to population and wealth 238
Comparative prospects of England and France - - 24-0
CHAPTER VIII.
On the National Revenue and Capital.
Property annually created in Great Britain and Ireland 246
Table of our present taxable income - - 248
Its increase since 1792 .... 250
Connexion between the increase of our numbers, and
that of our national income - - 251
The former the true basis for computing the latter
even amid the revolutions in property since 1792 - 253
Tables calculated on that assumption - 257
Comparative pressure of public burdens in 1792, 1806,
and 1814 - ..... 259
CHAPTER IX.
Fluctuations in the Value of Money.
Tracts published on this subject - 261
Historical sketch of such fluctuations - - 263
Can they be prevented in future ? - 266
Causes which affect the value of money - - ibid.
Supply of specie from the mines - - 267
Circulation of bank paper - 269
Supply of agricultural produce - - 270
Effect of a state of war - - 271
Injurious consequences of these fluctuations - - 273
a 2
XX CONTENTS.
Page
Plan for. lessening such consequences, and giving a uni-
form value to money incomes - - 276
A table of reference for time contracts - - 277
Effect of such a standard on the labouring class • 281
Effect of such a plan on agriculture - 283
- • • on tithe - 284?
on the public funds and govern-
ment annuitants - 286
Objections answered - - 289
CHAPTER X.
Our Finances.
The National Debt - - - 292
Fluctuations in the price of stock - - 294-
Reduction of the Five per cents. . - - 297
The Sinking fund - 300
Estimate of our annual expenditure - - 307
Stockholders ; distinction between permanent and tem-
porary depositors - 309
Difference of our resources in war and peace - - 314?
Plan of M. Necker. - - 315
Comparative taxation of England and France - - 319
Reduction of Taxation - - 320
Tabular statement of our Taxes - - 32 1
Our prospect of increased resources - - ibid.
Probability of continued peace ... 325
How far is Taxation a cause of distress ? 329
How far would a reduction of Taxes produce relief ? - 332
Expediency of an annual loan, in lieu of Taxes - 337
Transmission of capital to Foreign Countries - - 338
Effect of an annual loan on the rate of interest - - 34-1
on the price of Stocks ... 342
The period from 1783 to 1793 - 347
CONCLUSION of the Work - ... 348
CONTENTS OF THE APPENDIX.
CHAPTER I.
The late Wars.
Page
Our war expenditure in the form of tabular statements [1]
A similar statement of our exports, and an explanation
of the custom-house term, " official value" [4<]
Increase of government expenditure conducive to in-
crease of revenue - - - • * - [7]
CHAPTER III.
The late Wars.
Estimate of national loss arising from the late wars - [10]
Deductions from our apparent loss - - [14]
What would have been our financial situation, had war
been avoided? - - [16]
CHAPTER IV.
Currency and Exchange.
On the amount of Bank of England notes in circulation [19]
Uncertainty of inferences from such amount - - [20]
The Exemption act, how far a source of financial aid - [22]
Conducive in some respects to reduction of price - [24]
Was it similar in its effects to the increased productive-
ness of a mine ? - [26]
Considered as an economising expedient - - [27]
Remarks on the Bullion Committee - - [28]
Questions at issue between their supporters and op-
ponents . [30]
Inefficacy of an exemption from cash payments in
peace - . . [32]
xxii
CONTENTS OF THE APPENDIX.
Page
Publications on the subject of Exchange ; Mr. M< Cul-
loch - . . [33]
Changes in the value of money ....
CHAPTER V.
Our Agriculture.
Limited operation of our Corn laws - - [36]
Effect of increasing population on the price of corn - [37]
National disadvantage of a high price of corn - - [38]
Arguments m favour of a free trade in corn, by Mr.
Bannatyne, Major Torrens, and Mr. M'Culloch - [4-1]
Computation of Poor-rate and Tithe - - [4-2]
Connection between increase of population and increase
of rent - - - [44]
Comparative burdens on British and foreign agriculture [46]
A protecting duty ; Evidence of Mr. Tooke - - [4-8]
Reasons in support of that evidence ... [4,9]
Probable limitation of our corn imports in peace - [50]
Opinion of Mr. Ricardo and Mr. S. Gray - [53]
The case of Tenants on lease, and of Debtors on mort-
gage .... . - ibid.
Dr. Smith on agricultural improvers - - [55]
Price of wheat on the continent and in England, pre-
vious to 1793 [56]
CHAPTER VI.
Our Poor-rate.
Tabular statements of poor rate for England and Wales [58]
The same for the metropolis [59]
Proportion of marriages and deaths to the existing po-
pulation - [60]
Highway, church and county rate - ibid.
CHAPTER VII.
Population.
Employment ; its subdivision as society advances
Its minute division in a great city
10
[62]
[63]
CONTENTS OF THE APPENDIX. xxiii
Page
National income apportioned among different classes [64]
Population ; ratio of its increase in different stages, as
society advances - - [65]
Effect of machinery - [67]
Increase of population in the present age - [68?
Statistical table of Europe - - [69]
Comparative wealth of England and France - - [72]
Backward state of productive industry in France • [73]
CHAPTER VIII.
Our National Revenue.
Correspondence between our annual production and
consumption - [75]
Is our consumption equal to our production, or how far
is there an annual addition to national income ? - ibid.
Proportion of national income exempt from taxation - [78]
National capital ; estimate of it, in 1792, 1812, 1822- [81]
Public burdens in the present year ( 1822) discriminated
into taxes, poor-rate, and tithe ... [84 J
CHAPTER IX.
Fluctuations in Money.
Abstract of Sir G. Shuckburgh's table - [85]
Comparison by A. Young, of prices in the 17th and
18th centuries - [86]
Progressive prices of several articles of manufacture,
of horses and cattle - - ibid.
General progression of prices since the 13th century - [88]
Annual consumption of gold and silver computed - ibid.
Comparative rate of prices in France and England - [90]
M'Culloch (Mr. J. R.) on the price of corn throughout
Europe - [92]
Expence of a country labourer's family, and of one of
the middle classes - - [93]
Constituents of a table of national consumption - [95]
Distinction in regard to particular classes - [98]
Rent of land, mines, and tithe - ibid.
Objections answered ----- [99]
XXIV CONTENTS OF THE APPENDIX.
CHAPTER X.
Our Finances.
Page
Sinking fund ... . [102]
Comparison of our present burdens with those of 1792 [104]
The malt tax - - - [105]
Population.
Counties of England and Wales ; their area - - [106]
Their rental and resident population - - [107]
Census of 1821 ; increase of our population since 1811 [109]
Increase of our principal towns - [110]
Distribution of the population into classes - - [111]
Census of the year 1377 - ibid.
Agricultural Report of 1821, abstracted and reviewed [112]
Corn law of the present year (June 1822) - - [128]
ERRATA.
PAGE 157, line 2, for, " is relinquished to a considerable extent,"
read, " were relinquished to as considerable an extent. '
192, line 10, for "beneficial," read " beneficed."
Appendix, page 14, line 10 from the bottom, insert « under," after
"labour."
CHAPTER I.
The late Wars-, the Expenditure caused by them^ and the
Sources from which it was supplied.
IN appropriating a chapter to the war, our ob-
ject, as in other parts of the book, is to direct the
reader's attention to the effects produced on our
finances and national industry : to enlarge on the
events of a campaign or on the policy of cabinets,
would be, in a great measure, foreign to our pur-
pose. In some respects, however, the two depart-
ments of inquiry are connected, the effect of our
military operations having been repeatedly felt by
our exchequer, and requiring of course frequent
notice in the subsequent pages. It seems advise-
able consequently, that our reasoning should be
preceded by a brief sketch of the events of the
war ; an outline to which reference may be made
from the subsequent chapters, whenever we shall
have occasion to allude to the connexion between the
state of our finances and the aspect of a campaign.
Such a narrative, however cursory, will necessarily
lead us over beaten ground ; but we are not with-
out hopes of introducing, particularly in regard to
France, occasional remarks that are not altogether
familiar to the public.
War of 179S. — Nothing would have in-
duced Mr. Pitt to take part in the coalition
B
£ War of 1793.
against France, except a hope that the contest
would have been brought to an early conclusion,
and himself left at liberty to pursue those measures
of finance which had begun to wear so promising
an aspect. His apprehension of France could
be only of a political nature ; a dread of the ex-
ample of insubordination gaining ground, and of
rank and property becoming endangered. In a
military sense, France was far from formidable;
her army, in 1792*, did not exceed the usual peace
establishment of 130,000 men, and its strength was
greatly impaired by the emigration of its principal
officers, as well as by the general relaxation attendant
on a continental peace of thirty years. Her navy
having occupied the attention of government dur-
ing and after the American war, was in a better
state than usual ; but its efficiency was impaired by
the general disorder of the country, and its aspect
was certainly far from offensive.
Under these circumstances our government,
though in intimate communication with the powers
that had taken up arms against France, delayed for
some time joining the coalition. The recall of our
ambassador from Paris was postponed till the insur-
rections of autumn 1792, and the subversion of the
royal authority ; nor did our preparations for war
commence till towards the end of the year. This
caution on our part, and the impetuosity of the
ruling faction in France, caused the declaration of
war to proceed in the first instance from Paris, and
created a general belief in this country that the
French were the aggressors. A speedy termination
in favour of the allied powers was promised as well
by general appearances as by the early events of
* Jomini sur les grandee Operations Militaires, Vol.V.
War of 1793. 3
the war, the French being soon repulsed from the
Dutch frontier, and some time after from the
Netherlands, while their intestine divisions rose to
a height that threatened the downfall of the repub-
lican system. A short time, however, sufficed to
show the fallacy of judging from appearances, and
of listening to representations so partial as those of
the emigrants. The great majority of the nation,
without cherishing either personal hostility to the
Bourbons or schemes of foreign conquest, were
strongly attached to the Revolution. * They had
long felt the want of a representative assembly,
and been wounded by the preference shown to the
privileged classes : — without any distinct concep-
tion of the checks requisite to good government,
they entertained a sanguine hope that the revolu-
tion was about to prove a remedy for all their
grievances.
Under such circumstances, the resistance to in-
vasion would probably have been equal, whatever
had been the result of the intestine divisions of
France. Had the Jacobin party been kept under
by the Girondists, the strength of the country
would still have been called forth ; the property of
emigrants confiscated ; circulation given to the
assignats, and military levies enforced on a large
scale. It was in the autumn of 1793, and in the
early part of 1794, that these potent levers were
made to display all their energy. They sent forth
armies, which, without being so numerous in the
field as was generally imagined, were assured of
an ample supply of recruits ; an assurance that
justified the new plan of rendering a campaign a
reiteration of attacks, on the calculation, that, whe-
ther successful or not, the country which could call
the greatest numbers into the field, would even-
B 2
4 War of 1793.
tually triumph. Such, with a few qualifications,
were the operations of 1793 and 1794 : operations
in which the national impetuosity was called into full
display ; but the command being frequently placed
in unskilful hands, the lives of men were exposed
with unexampled rashness. £he result of con-
tinued sacrifices on the one side, and of feeble
generalship, of deficient concert, on the other, was
that, in the early part of 1795, a total change took
place in the aspect of the war. By that time, France
had acquired both the Austrian Netherlands and
the Dutch provinces, was on the point of con-
cluding peace with Prussia and Spain, and reck-
oned only Austria and England as her opponents.
From this time forward, we may believe with
confidence, that Mr. Pitt deeply regretted that
France had been attacked, and the nation driven
to exertions so pernicious to its assailants. He
saw that revolutionary contagion was no longer
to be dreaded, the credulity of the French, their
absurd extremes, their repeated changes, their sacri-
fice of one party to the other, having brought com-
plete discredit on their politics. His objections to
peace, very different from those in 1792, were now
of a military character :> — to negotiate with France
would have been to acknowledge inability to resist
her ; to leave the Netherlands in her hands, would
have been to concede that against which we
had struggled for a century. He determined,
therefore, to continue the war, with the aid of Aus-
tria; and the exertions of France might have been
equalled, perhaps surpassed, by the two allied go-
vernments, had they possessed the knowledge which
they afterwards acquired ; had England directed
her chief resources to continental warfare, and had
the Aiistrians opened their eyes to their errors in
*i
War of 1793. 5
tactics. The numbers of the French were now less
overwhelming than in the days of paper credit ;
but their efficiency was greatly increased, their sol-
diers had become well disciplined, and a number
of intelligent officers had been formed. Their sys-
tem of attack was continued, the national ardour
was kept in full exercise, and to the audacity of
the first years of the revolution was added, under
the command of such men as Bonaparte, Moreau,
Kleber, Hoche, the advantage of scientific com-
bination. It is to superiority of generalship more
than to superiority of numbers, that we should at-
tribute the reverses of the Austrians in 1796 and
1797, followed by a peace (Campo Formio) of
which the preliminaries were signed when three
armies were in march to their capital.
England now stood alone in the conflict, and the
state of our finances was far from satisfactory ; but
our navy had in the course of the year (1797)
achieved a double triumph, and the war becoming
strictly maritime, our attitude, like that of France
in 1794-, showed all the advantage possessed by a
nation, when combining its resources on its proper
element. The confidence thus inspired, and the
spirit roused by the extravagant ambition of the
French government, enabled Mr. Pitt to meet
our pecuniary difficulties, by a recourse to the
plan which we shall develope presently, that of
raising supplies within the year ; a plan to which,
much more than to the substitution of paper for
coin, was owing the surprizing increase that took
place in our financial receipts.
The year 1798 will long be remembered by
those who distinguish particular epochs in a great
contest, as one of favourable commerce, of improved
exchanges, of an abundant harvest, and of relief
B 3
0 War of 1793.
from the dread of invasion. The French, discou-
raged by our naval array, and by the failure of
their expedition against Ireland, made a tacit ac-
knowledgement of the hopelessness of an attack
on England, by directing their disposable force to
Egypt. The absence of this army, and our vic-
tory at Aboukir, revived the hopes of the Austrians,
who regarded the existing peace as a truce, and
who have throughout shown themselves so prompt
to second our efforts, and to take up arms against
France.
We come now to what the French term the third
coalition, that is, the third time that the allied
powers commenced operations by land in the hope
of either changing the French government, or reco-
vering a portion of lost territory. In adverting
to these remarkable aeras in the contest, it is fit to
recollect that the aggressions were not on the part
of France, and that, witH the exception of 1792,
England was the author and main-spring of every
successive coalition. Had this been openly avowed,
it is probable, that in these days of alarm the
majority of the public would have approved of an
offensive system of war j but it is the well-known
rule of cabinets, and, of course, of their sup-
porters, whether in parliament or connected with
the press, to avoid such admissions, and to throw,
as much as possible, the odium of attack on the
enemy. At present, such reserve is needless ; the
question is to be viewed historically, and the point
is merely, whether there existed, on the ground of
justice and policy, sufficient reasons for calling
the continent to arms, and for encountering the
hazards of a conflict by land? The dread of revo-
lutionary infection had by this time disappeared ;
the French themselves had suffered cruelly from
War of 1793. 7
their experiments in government, having felt all
the instability, all the division and party violence
attached to the republican form. But while the
reflecting part of our countrymen had dismissed
all apprehension of political contagion, they had,
in a military view, urgent motives for hazarding
an appeal to arms; they entertained the hope, that,
with the co-operation of Austria and Russia, we
should expel the French from Italy and recover
the Netherlands.
These hopes, whether on the whole justified or
not, received confirmation from the events of the
first part of the campaign of 1799 > the Austrians
took the field with augmented numbers and an im-
proved system ; the repulse of the French in every
direction, in Germany, as in Italy, proved the danger
of neglecting their military establishment, and of the
practice which had begun to show itself for the first
time since the revolution, of appointing generals
by favour. But in the autumn of the year new
levies took the field, and abler chiefs commanded ;
the war changed its aspect ; a few months produced
the defection of the fickle government of Russia
from the coalition, and consolidated the executive
power of France in the hands of Bonaparte. The
campaign of 1800, though opened by the Aus-
trians with confidence, soon showed their inability
to contend with their antagonists, and on the conclu-
sion of the second continental peace, (Luneville,)
England was once more left alone in the conflict.
Few periods of the war presented a more gloomy
combination of circumstances than the early part
of 1801. — Austria humbled, Russia hostile, Den-
mark and Sweden following her example, and re-
viving the menace of the armed neutrality. At home
a double failure of harvest had produced a scarcity
B 4
8 War of 1793.
and rise of prices, which, in some parts of the coun-
try, resembled the privations of our ancestors in the
latter years of Elizabeth, or the sufferings of France
after the dreadful winter of 1709- On the other
hand, the value of our paper currency was but
slightly affected, our navy possessed the undisputed
command of the sea, while our army had improved
equally in strength and numbers : hence, the suc-
cess of our attack on Copenhagen, and our brilliant
exploits in Egypt. Still the policy of peace was ap-
parent ; our financial resources had been stretched
to the utmost ; there remained no definite object
of warfare, and no co-operation could be expected
from the continent. These considerations were
felt by our leading ministers ; and, in concurrence
with an apprehended division in the cabinet, or a
sense that the same ministry could not suitably
negotiate with a government so long the object of
its invective, led to that retirement of Mr. Pitt
from office, which many persons stiJl good-naturedly
ascribe to his difference with the king on the Catho-
lic question.
Thus ended the first great contest of the age, a
contest of which the most remarkable feature was,
its placing the two leading powers successively in
opposition to a confederacy, and baffling, in the case
of each, the confident calculation of politicians.
France, they presumed, in 1793, must sink under
the coalition $ England, when left alone, in 1 797>
had, in their view, no alternative but a speedy
peace. They were more correct in asserting that no
war had afforded an example of such sacrifices ;
of men on the part of France, of money on the
part of England. The losses of each seemed of a
nature to produce exhaustion, yet each continued
capable of prolonging or renewing the conflict.
Our Situation at the Peace of Amiens. <J
Each had obtained brilliant success, and added
largely to its territorial possessions ; but the acqui-
sitions of France, at least in the Netherlands, were
more compact, and more calculated to add strength
to the state, than our dazzling but insecure con-
quests in the East and West Indies.
Our Situation at the Peace of Amiens. — What, it
may be asked, were the chief differences, in our
condition at the peace of 1802 and that of 1814?
The financial and commercial evils that have since
pressed so heavily on us, existed in 1802, but in a
very mitigated form. The interest of our public debt,
(18,000,0007.) was great, but not enormous ; our
total expenditure, had peace been confirmed, might
not perhaps have exceeded 30,000,000/. a year.
The value of our currency, though shaken at a
particular period, (1800 and 1801,) had been rein-
stated without much injury to the public ; and
our customers on the opposite shore of the Atlan-
tic, though affected by the transition of Europe
from war to peace, were by no means so disabled
from paying for our exports as at the peace of 18 14.
Still our agriculturists felt the sudden change from
high to low prices ; our merchants were embar-
rassed by the surrender of the conquered colonies,
and had the reduction of our military establish-
ment been permanent, we should have experienced,
in 1802, no small share of the embarrassment of late
years : it would have been similar at least to that
so faithfully described by Sir W. Temple, as affect-
ing the productive industry of Holland, after the
peace of 1648.
These complaints, however, had hardly assumed
consistency, when the public was roused to new
alarms : in France, a ruler whom no power could
10 WarvflSOS*
satisfy ; in England, a ministry who followed, in-
stead of leading the public voice, were respectively
the authors of an abrupt renewal of war. Seldom
has an appeal to arms been made with less of a
direct motive or definite object : Malta was too
insignificant to form a ground of war ; the real
cause was of a general nature, and to be sought
in the encroachments of Bonaparte during the
interval of peace, in the resentment roused by his
aggression on Switzerland, and the obstacles op-
posed to our trade with France. Our ministers could
not consider the moment favourable for attempting
to recover the independence of the continent ;
they acted in concert with none of the great
powers, and the experience of the past wras altoge-
ther adverse to hopes founded on a coalition.
They knew, however, that our financial resources
were large, that the chances of a naval contest
were in our favour, and that we should in any
event prevent the increase of the enemy's ma-
rine.
War of 1803.— During two years the contest
was strictly maritime, and no part of our resources
being directed to continental subsidies, our paper
currency maintained its credit. The public attention
was closely fixed on the project or pretended pro-
ject of invasion. But in 1805, the growing discon-
tent of the Russian cabinet with Bonaparte, and
the well-known hostility of Austria, induced our
government to form a new coalition. Our allies
began the war with sanguine hopes, but found it
vain to attack a great military state, conducted by
a single head. The result would have been alarm-
ing even to this country, had it not, by a remarkable
counterpoise of fortune, been coincident with a
JFtfrr/1803. 11
naval victory which fairly put at rest the question
of invasion.
It was under these circumstances of alternate
disappointment and success, that Mr. Fox began
at Paris the negociation of 1806, a measure by no
means sanctioned by the majority of our country-
men. The offers of Bonaparte, towards the close
of the conferences, would perhaps have been satis-
factory on the score of territorial cession, had they
not, when viewed in concurrence with his other
projects, appeared to our government little else
than a link in the chain of aggression; an expedient
to procure not a peace, but a truce.
War was accordingly renewed, and by land, vic-
tory continued faithful to France : the events of
the campaigns of 1806 and 1807, were subversive
of the remaining independence of Germany, and
by giving France the co-operation of Russia,
seemed to leave her without a rival on the conti-
nent. Under these circumstances, our only safety
lay in our naval superiority, and the war was pro-
ceeding without any definite prospect or favour-
ble opening, when Bonaparte committed his first
great political error. Hitherto, in his successes,
he had shown more moderation, at least apparent
moderation, than might have been expected from
one so little advanced in years, and so confident in
his general calculations. He now, however, forgot
the dictates of caution, turned his aggression to an
unoffending quarter, and by his manner of inveigling
the royal family of Spain, excited not only the in-
dignation of foreigners, but general surprise and
dissatisfaction among the French, who were heartily
sick of war, and coveted no possessions beyond
the Pyrenees or the Alps. It is a truth, by no
means sufficiently understood in this country, that
12 War of 1803.
the French people at no time participated in the
restless ambition of their rulers : their desires in
regard to territory were limited to the Belgic pro-
vinces, and these they desired not on political
grounds, not from a wish to overawe Holland or
threaten Germany, but from considerations chiefly
commercial, from similarity of language and habits,
vicinity of position, and the non-existence of phy-
sical barriers. So far from being animated by that
eagerness for war which so many on our side of
the Channel ascribe to them, the French regarded
themselves as the greatest sufferers by the san-
guinary contest, and were taught to ascribe its pro-
longation to the ambitious views of our cabinet.
The war in Spain, varied as was its success
during several years, proved the first great scene
on which the hitherto victorious armies of France
were effectually resisted. That power of combi-
nation, that skill in generalship, which, in the pre-
sent age, has been so little conspicuous in the mili-
tary opponents of France, which, in the long
struggle of the Austrians, was remarked in only
two campaigns, (1795 and 1799,) was here called
into action, and directed against the enemy both
the discipline of the British, and the national an-
tipathy of the Spaniards. This war may be termed
the first in which Bonaparte did not, on the
appearance of serious resistance, forsake his capi-
tal, and bring the struggle to a decisive issue. In
1810, the humiliation of Austria and Prussia left
him at liberty to recross the Pyrenees, but to the
surprise of France, as of the continent in general,
he allowed his army to remain long in an indecisive
position before our lines at Torres Vedras, and
eventually to retreat.
War of 1803. 13
This signal repulse was followed by symp-
toms of resistance in a new quarter. Russia,
alarmed for her independence, and taught, by the
success of our Portuguese campaign, the means of
baffling by defensive operations, an enemy hitherto
accounted irresistible, no longer concealed her
hostility to France. Bonaparte passed a year in
forming his gigantic plan of invasion : it failed, as
is well known, less from direct opposition than
from physical causes ; and that over-confidence on
his part, which we trace on so many occasions, and
at such different periods of his career — at Arcole,
at Acre, at Aspern, and finally, at Waterloo.
The loss of the Russian campaign and of the
flower of the army, however disastrous in a mili-
tary sense, did not give so great a shock as the
public in England anticipated to the power of
Bonaparte in the interior of France. The nation
was in affliction at the extent of the bloodshed ; but
this feeling was overborne, at least in the middle
classes, by the dread of a counter-revolution, and
the return of the old abuses — the privileges of the
noblesse, the ascendancy of the clergy. During
1813, the general wish was, not for a change of
dynasty, but for a change of system under the
existing ruler. No insurrection took place, no re-
sistance was made, or even attempted* to the enor-
mous levies of men and money, during that year ;
nor was it till renewed disasters, and the loss of
all Germany, that the public began to contemplate
the possibility of the return of the Bourbons. Even
in 1814, the operations continued without any
rising in favour of that family, or any defection of
the military from their leader, till after the surren-
der of Paris, the possession of which has, through^
14 War of 1803.
out the whole of the French revolution, enabled
one party to give law to another.
This unconsciousness of the real character of
Bonaparte, this credulity in hoping a pacific sys-
tem from one so long accustomed to war and usur-
pation, must appear not a little singular to the
untravelled part of our countrymen. But those
among them who visited France in 1814, had am-
ple opportunity of observing that the name of the
late ruler was seldom mentioned with reproba-
tion, and that when, from the decided royalists,
they happened to hear language to that effect, it
was unaccompanied by any knowledge of the
secret springs of his policy, or, indeed, by any
attempt to develope his character.
This was, in fact, a task too complicated for the
reasoning habits of our southern neighbours : they
knew and lamented his propensity to war ; but his
diplomatic art, his Machiavelian policy, surpassed
their analysing powers, unaided as they were by
the light of a free press. Nor was it until his sudden
return from Elba, when the peace so long desired
and so recently obtained, was wrested from them,
that the French, (we speak here not of the mili-
tary nor of the party leaders, but of the bulk of
the nation,) gave a loose to resentment, and con-
nected with his name that charge of faithlessness,
that suspicion of criminality which we, during
so many years, had accounted inseparable from it.
The reverses of the French arms occurred most
opportunely for our finances, as shall be shown
when we treat of the depreciation of our circula-
ting medium ; but before proceeding to that, the
proper object of our research, we shall bestow a
few sentences on the eventful character of the mi-
litary history of the period.
Alternations of Success. 15
Alternations of success. — No contest was ever
marked by greater variety of fortune, or more
chequered by vicissitudes, the effect of which was,
at one time, to check sanguine expectation, at ano-
ther, to prevent despair. In 1805, our hopes were
raised by the co-operation of the great continental
powers ; these hopes were blasted at Ulm and Aus-
terlitz, but despondency was prevented by our
victory at Trafalgar. Next year, the fatal day of
Jena, and the conquest, rapid beyond example, of
the Prussian dominions, would have excited great
alarm, had not our courage been sustained by a
successful resistance at Eylau, and by a confident
estimate of the power of Russia. These favoura-
ble expectations were shaken by the events of the
campaign, the treaty of Tilsit, and more than all,
by the increasing connection and community of
purpose between the French and Russian cabinets.
The close of 1807 was consequently a period of
gloom, for the capture of the Danish navy, and the
issuing of our orders in council, could afford satis-
faction to those only who were incapable of appre-
ciating the odium inspired by the one, and the
disastrous effects likely to result from the other.
A more substantial ground of hope was afforded
in the ensuing year by the attack on Spain, the
general resistance which it provoked, the still more
general hatred which it roused. The repulse of
the French from the southern and central parts of
Spain, and the success of our troops at Vimeira, the
first general action on land that we had fought dur-
ing the war, confirmed these flattering impressions ;
but they were unfortunately clouded by the re-
peated defeats of the Spaniards in the winter, and
the retreat of our army to Corunna. Next year
opened with the arming of Austria, and with some
10 Alternations of Success.
successful operations in the peninsula, but the
battles of Eckmuhl and Wagram, the failure of our
Antwerp expedition, the second retreat of our
army from Spain, cast a gloom over the aspect of
affairs, which continued during the whole of 1810.
At this time the contest presented no expectation
of a favourable issue ; the Spaniards were ineffi-
cient and divided ; the northern courts, if not un-
friendly, were unable to hazard co-operation with
us ; and our bank paper, after withstanding the
continental drains of 1805, 1806, 1807, began to
.yield under the triple pressure of a subsidy to
Spain, purchases of corn in the north of Europe,
and the suspension of the American trade. From
invasion we were secured by our fleet, but we
dreaded to make peace, lest an interval, turned
assiduously to account by our artful enemy, might
shake even this last stay of our independence. On
other grounds also, peace seemed unadvisable, for,
by this time, Bonaparte had incorporated a far-
ther part of Germany with France, and shown
himself equally blind to the lesson given by the
resistance of Spain, and to the hazard of alarming
Russia.
It was under these disquieting circumstances
that we passed the latter months of 1810 and the
beginning of 1811. The necessity of abandoning
the peninsula was declared by many, and silently
anticipated by more, when the scene was unex-
pectedly changed by the retreat of the French
army from Portugal, and by conflicts, which, if not
altogether decisive in our favour, were indicative of
the great improvement of our army. An intimation
of a growing hostility on the part of Russia to
France, now raised hopes of a higher kind — hopes
which, after an interval, were confirmed by the
Our Expenditure during the War. 17
memorable campaign of 1812. Still the period of
vicissitude was not passed ; the expectation excited
by the advance of the Russians, and the zeal of
their Prussian allies, were disappointed at Lutzen,
Bautzen, and Hamburgh ; nor were they placed on
a firm basis until the junction of Austria to the
alliance, and until the inefficiency of the French
levies was shown in their actions with the Prus-
sians in Silesia. Even after the conquest of Ger-
many and invasion of France, there occurred an
interval of suspended hope: the imprudence of
Blucher, and the prompt decision of Bonaparte,
led to a check and partial retreat, which, to the
public, assumed a serious aspect, when viewed in
connexion with a negotiation at Chatillon ; but
the apprehension inspired by that real or ostensible
negotiation, was soon dispelled by the evident supe-
riority of the allies, and by the result of a movement,
remarkable as indicative of the over-confident cal-
culation of Buonaparte even under disaster; we
mean his march to gain the rear, and cut off the
retreat of his enemies — a manoeuvre that might
have been followed by final success if at the head
of such armies as he commanded at Ulm and Jena,
but which, with the feeble means at his disposal in
1814, served only to embolden his opponents, and
accelerate the loss of his capital.
Our Expenditure during the War, — After this
brief sketch of events, we proceed to the proper
object of our enquiry, the expence incurred by the
war, the resources by which it was supported, and
the cause of our financial embarrassments, since
c
18 Our Expenditure during the War.
the peace. In this we venture on difficult ground,
and attempt a question of more than usual com-
plexity. War, accounted in former days a season of
embarrassment and poverty, assumed in the present
age the appearance of a period of prosperity. It
close4> indeed, with a great addition to our per-
manent burdens, but with an increase of national
income, which seemed fully to counterbalance it,
and to confine our loss to that of our brave coun-
trymen who had fallen in the struggle. Peace, we
thought, was about to bring a consolidation of the
advantages earnedin battle and sanctioned by treaty,
but the result has been widely different : every suc-
ceeding year has discovered some financial difficulty,
some fresh defalcation in our national resources.
The causes have as yet been by no means satisfac-
torily explained, either in or out of parliament, and
the contradiction between what was expected, and
what has actually taken place, implies the preva-
lence of much popular error, as well as the necessity
of an attentive and anxiously-balanced inquiry.
This inquiry we may hope to divest, in some
measure, of its complexity, by proceeding step by
step, and dividing our subject into separate heads.
The first point is to form a distinct idea of our war
expences, as well the annual charge as the aggre-
gate for the whole contest ; a calculation as yet
familiar to few persons on account of the magni-
tude of the sums, the detached manner in which
they are generally brought before the public,
and the complexity of our finance accounts, which
have hitherto presented, in the sinking fund, an ap-
parent surplus, and, under the head of supply, an
apparent deficiency.
In the early years of this memorable contest, mi-
nisters were almost as little aware as the public
Our Expenditure during the War. 19
of the extent to which the national contributions
could be carried, and the increase of our expen-
diture was, consequently, gradual. Taking the total
money rajsed by loans and taxes, but deducting
from it 18,OOQ,000/. annually, as the probable
expenditure of Great Britain and Ireland, had
peace been preserved, we find the following re-
sult : —
Sums annually raised for the war of 1793.
1793. - £ 4,000,000 1798. - ^29,000,000
1794. - 10,000,000 1799. - 36,000,00.0
1795. - 18,000,000 1800. - 36,000,000
1796. - 26,000,000 1801. - 45,000,000
1797. - 35,000,000 1802. - 44,000,000
These sums are properly the amount raised,
not the amount expended in each year : still they
convey a fair idea of the annual cost of the war.
Their great increase, in the latter years, is owing to
several causes ; the augmentation of our establish-
ments, the depreciation of money, ancl conse-
quent rise of pay, stores, &c. ; and, finally, to the
accumulation of interest on the expenditure of all
the preceding years.
Such was the war of 1793, a war exhibiting
an average expenditure of 27>WO,000/., which,
though nearly double that of any preceding con-
test, was destined to be soon surpassed, and in a
very great degree.
Sums raised by loans and taxes for the war of 1803,
after deducting the portion appropriated to Ire-
land, and allowing 22,000,0007. as the total of our
probable expenditure, had peace been preserved
in 1793.
1803. . ,£29,000,000
1804. • - 40,OQO,pOO
1805. 52,000,000
c %
20 Our Expenditure during the War.
1806. - ^50,000,000
1807. - - 56,000,000
1808. ... 57,000,000
1809. (War in Spain) 61,000,000
1810. (Ditto) - 62,000,000
1811. (Ditto) - - 66,000,000
1812. (War in Spain and Russia) 80,000,000
1813. (War in Spain and Germany) - 98,000,000
1814. (War on the French territory) - 89,000,000
1815. - 86,000,000
Here also the increase was progressive ; so ne-
cessary was it even in our day of enthusiasm, to
wait until the machine of circulation became
adapted to this new impulse. At last, our expen-
diture reached a sum unexampled in the history of
any country, ancient or modern. It is fit, how-
ever, to keep in mind two very material qualifica-
tions ; first, that the sums in the latter years are
greatly swelled by the accumulation of interest
on the previous expenditure ; next, that after 1810,
a large sum, fully 20 per cent, on our foreign
disburse, is to be put to the account of the depre-
ciation of our bank paper. With these deduc-
tions, the expence of the unparalleled year of
1813 may be stated at 70,000,000/., and the other
years reduced in a corresponding proportion. But
after every subtraction, the amount of our expen-
diture was surprising: for the whole contest it
may be thus stated.
Total money raised in Great Britain
by loans and taxes, during the 23 years
that elapsed, between the beginning of
1793 and that of 1816 ; (see Appendix)
about - 1,564,000,000
Deduct for the amount of our peace
establishment and charges unconnected
with the war, a sum, which, from the in-
Our Expenditure during the War. 21
crease of our population and the neces-
sity of enforcing the collection of the
revenue in Ireland, we reckon at some-
what more than the average expenditure
of Great Britain and Ireland, previous
to 1793; making (see Appendix) an
amount of about - - j£464,000,000
Remainder,constitutingthecharge-| ^
of the war - - - J
The next question is, in what manner did go-
vernment find it practicable to raise these unex-
ampled sums ? Loans, the great resource in former
wars, were resorted to during the early years of
the contest ; thus —
Money raised by loans.
1794. - ^11,000,000 1796. - ^25,500,000
1795. - 18,000,000 1797. - 32,500,000
The last of these sums being great beyond ex-
ample in the history of our loans, had the effect of
lowering stocks in an alarming degree, reducing the
3 per cents, in 1797> below 48. * Mr. Pitt now
felt the necessity of altering his plan of finance,
and was led, as well by his characteristic confidence,
as by the general increase of individual income
attendant on the war, to adopt the very bold expe-
dient of war taxes, or, as it was termed, raising a
large proportion of the supplies within the year.
The success of this plan forms the grand feature
of the financial history of our age : attempted at
first on a limited scale, it was carried, by the im-
position of the income tax, to a large amount, and
before the close of the war attained a magnitude
almost incredible.
*
* Dr. Hamilton on the National Debt, p. 252.
c 3
22 Supplies raised within the Year.
Supplies raised within the year, being the net pro-
duce of our taxes, after deducting 18,000^0007. as
the computed average of a peace establishment,
and excluding all foan$.
War of 1 793. — During the first four
years the war taxes were inconsiderable,
and in 1797, by the increase of the as-
sessed taxes, they were carried to only - £ 3$000,000
But iii 1798. by the income tax to - 12,000,000
1799. - - 17,000,000
1800. 16,000,000
1801. 17,000,000
1802. . is,obd,bbtt
War of 1803. — Tlie produce of our
annual supplies computed as above,
with the exclusion bf loans, but after de-
duction of a larger sum (22,000,0007.)
as the probable peace establishment :
1803. - 16,000,000 1810. - 45,000,000
1804. - 23,000,000 1811. - 43,000,000
1805. - 28,OdO,000 1812. - 41,000,000
1806. - 31,000,000 1813. - 45,000,000
1807. - 36,000,000 18 14. - 48;000,000
18D8. - 40,000,000 1815. - 48,000,000
1809. - 41^000,000
Respective proportion of loans and taxes.
Of the total sum of 1,100,000,0007. expended
during the war, the amount added to our perma-
nent debt was 460,000,0007., so that the aggregate
of the supplies raised within the year, amounted
for the whole war to 640,000,0007., a surprising
sum to be obtained by a mode of supply almost
unknown in foreign countries, and carried in former
wars to a very limited extent among ourselves.
The financial history of the war may be divided
into three periods ; 1st, the four years previous to
1797, in which bur treasury was conducted as in
Supplies raised within the Year. 23
former wars, without any innovation in regard to
war taxes or paper money ; 2d, the interval from
1797 to 1805, in which we had both war taxes and
non-convertible paper, but without greatly depre-
ciating the one, or carrying the other to an ex-
treme ; 3d, the period from 1805 to 1815, in which
the amount of the supplies raised within the year
became enormous, and the depreciation of our
paper, particularly after 1810, formed a very seri-
ous addition to our difficulties.
We have thus exhibited a statement of our
expenditure, which, though brief, is, we trust,
perspicuous, all complexities of redeemed and
unredeemed stock, all distinctions of funded and
unfunded debt, being excluded from our calcula-
tion, and the charge of the war considered only
under the two great divisions of debt contracted
and expenditure defrayed in tne current year.
Compared with these sums, how insignificant were
the additions made to our public burdens by former
wars. That of 1689, under King William, cost
annually between 3 and 4,000,000/., and added in
all 20,000,000/. to the national debt. Under Queen
Anne, the flattering hopes inspired by repeated
victories, led to a longer contest and larger outlay,
carrying our annual expenditure to 5 or 6,000,000/. ;
the addition to the public debt during the war to
somewhat more than 30,000,000/. In the less suc-
cessful contest of 1740 our expenditure differed
from year to year ; the addition to our public debt
amounted to nearly 30,000,000/. In that of 1756,
the augmented resources of the country, and the
bold system of Lord Chatham, raised our annual
expenditure to an average of 16,000,0007., the ad-
dition to our debt to fully 60,000,000^. The un-
fortunate contest with our colonies, and the war
c 4
24 The Sources of our Financial Supplies.
that ensued after 1778 with European powers, was
attended with an average charge of 17,000,000/.,
and an addition to our debt of somewhat more
than 100,000,0007. The total of public debt in-
curred in the course of a century was thus
S40,000,000/., a sum which, however large, formed
only the half of that which we have contracted in
the present age.
The Sources of our Financial Supplies. — The
next and by far the most important step in the
progress of our inquiry is, by what means and from
what sources the nation was enabled to meet such
unprecedented demands. In the opinion of many,
the means were derived from the extension, or as
it is commonly termed, our monopoly of foreign
commerce. " The French revolution," said the
late Arthur Young *, " burst forth like a volcano,
" and laid the industry, manufactures, and com-
" merce of France, and eventually those of the
" whole continent in the dust ; Britain became the
" emporium of the world, and such a scene of wealth
" and prosperity filled every eye in this happy coun-
" try, as the sun before had never shone upon."
The belief of such a monopoly has, on the part of a
merely practical man, or in the pages of a pamphle-
teer, nothing surprizing, but we were little prepared
to find it in a publication of large circulation and ac-
knowledged ability, t The fact is, that the amount
of our foreign commerce was not greater, nor so
great at any time during the war as since the
peace ; a point which may at once be ascertained
by a reference to our custom-house returns of ex-
ports and imports. These documents, however,
* Inquiry into the Value of Money in England, 1812; p. 77,
•)• Edinburgh Review. No. Ixv. p, 170,
The Sources of our Financial Supplies. 25
unfit to represent the balance of mercantile pay-
ments from one country to another, form good
authorities for ascertaining the comparative extent
of our business from year to year. We shall give
the result of our Custom-house return of exports
in two modes ; first, by the official value, which
means (see Appendix,) the value computed by
the weight or dimensions of merchandize, and at
a uniform rate of price, without reference to the
fluctuations of the market.
Total exports from Great Britain computed ac-
cording to the jixed official standard of the Cus-
tom-house.
Average of the nine years of the first
war, viz. from the beginning of 1793 to
that of 1 802 - ^30,760,000
Average of ten years of the second
war, from 1803 to 1812, both inclusive,
leaving out 1813, the records of which
were destroyed by fire, and considering
1802 as a year of peace 42,145,000
But if we compare this with the seven years of
peace, of which the returns have been made to par-
liament, we shall find a considerable increase since
1814.
Average of the total exports from
Great Britain, computed officially for
the seven years, from 1814 to 1820,
both inclusive - ^53,922,000
These returns being made on a uniform plan,
and calculated by the weight or dimensions of
the package, are conclusive as to the quantity of
our exports : but it may be said, that in other re-
spects, they are less satisfactory ; and that although
the bulk exported is at present greater, the value
26 The Sources of our Financial Supplies.
is less, in consequence of the general reduction of
prices. That prices were much higher during the
war, particularly in the latter years, admits of no
doubt, but in whatever way the calculation be made,
the advantage is on the side of peace, thus : —
Exptirte from Great Britain during the war, com-
puted not by the official or Custom-house valu-
ation, but by the de'claration of the exporting
merchants ; or, when there was no declaration, by
a suitable addition to the official value.
Average of the ten years from 1791
to 1801, both inclusive - j£48,890,000
Average of the ten years from 1801
to 1810 - - 52,847,000
In peace, our exports afford an average conside-
rably larger, after making, (see Appendix*) an
allowance for the reduced value of foreign and
colonial goods.
Average of our annual exports from
1814 to 1820, both inclusive, valued by
the declaration of the exporting mer-
chants, or by a suitable addition to the
official value - ,£62,330,428
In both points of view, therefore, our foreign
commerce is found to have been less considerable
in war than in peace 5 it is equally easy to show,
that its profits were wholly inadequate to the sup-
port of any large addition to the public expendi-
ture. Mr. Pitt, on proposing the income-tax in
1798, computed our foreign commerce to yield to
the various persons, merchants and others, en-
gaged in it, an annual income of 12,000,000/., a
sum, probably not underrated at the time, but
which, for the sake of giving those who differ from
us the full benefit of argument, ought, we shall
TJie Sources of 6ic)r Financial Supplies. 27
suppose, to have ueen doubled and taken during
the war, at an annual amount of 21,000,000/.
This, be it observed, is hot saving but income,
out of which arc to be supported all the persons
engaged in the business : and if we compute the
clear saving in a proportion, which, in regard to
most other branches of industry, would bembrethan
sufficiently liberal, the result xvill be a yearly gain
of three millions sterling. What will be thought
of this sum as a counterpoise to bur war expendi-
ture, or as a confirmation of the notidns of those
sapient calculators who still imagine Hie surplus bf
our exports over bur imports, as stated in our
Custdm-house returns, to represent the amount of
money brought annually into the country ?
Of all the branches of our foreign commerce,
the greatest extension took place in that 1#lth the
Uiiited States: but that outlet was closed, seve-
ral years before the end bf the war ; and, how-
ever prddtictive of work to our manufacturer^,
has never been considered a ftind for pecu-
niary aid.
Our other sources of imagined supply were the
occupation of new colonies, the suspension bf the
navigation of hostile States, and a Supposed reduc-
tion of their rival manufactures. Of the con-
quered colonies, the prihcipal were Trinidad, Dg-
merara," Essequebo, Tobago, £ach little advanced
in cultivation, each requiring a large transfer of
capital from this country, and each yielding little
present revenue. Similar disadvantages charac-
terised, though, in a less degree, St. Lucia, Guada-
loupe, Martinique. As to the East Indies^ our
acquisitions, vast in point of territory, and consi-
derable in regard to internal revenue, are, as is well
known, of Very secondary importance in respect to
28 The Sources of our Financial Supplies.
commerce, though, on the continent of Europe,
there prevails an opinion that India is the grand
source of our national wealth.
We come next to a very plausible argument,
the benefit supposed to arise to us from the sus-
pension that took place during the war of the na-
vigation of France, Holland, and the other States
dependent on France. The fact doubtless was, that
the flag of these countries could not appear on
the ocean, because they had not men of war to
protect their convoys; but the transfer of navi-
gation wa^made less to British vessels than to neu-
trals, Americans, Danes, Swedes, Prussians, and
to Dutch shipping, bearing the flag of the petty
ports in the north-west of Germany. Lastly, in
regard to manufactures, those of France have
undergone no reduction since the Revolution, and
much less fluctuation than is commonly supposed :
during the last thirty years they have been on the
same scale of gradual increase as before ; that is,
they have all along kept pace with the wants of a
country, increasing progressively, though not
quickly, in population.
Compelled to quit their favourite ground of
foreign commerce, to what do these calculators
resort for the purpose of explaining our prosperity
during the war ? Government loans and contracts,
however profitable in vulgar estimate, are obviously
out of the question as a source of national supply.
The command of money, given by the adoption
of a paper currency, is a theme confidently urged, to
use a parliamentary phrase, both " in and out of
doors ;" but enough, we trust, will be advanced
in a succeeding chapter to show that the extent of
supply, and even of accommodation derived from
that source, has been greatly over-rated. We
The Sources of our Financial Supplies. %Q
dwell, therefore, no longer on these delusive sup.
positions, but proceed to what appears to us the
true solution of this financial enigma, seeking it in
the remarkable increase not of our transactions
with foreign countries, but of our productive in-
dustry at home.
General increase of employment in war. — Those
of our readers who are old enough to recollect the
interval of peace from 1783tol793, willnot havefor-
gotten, that though by no means an unprosperous
season, it was marked by the symptoms common
in an aera of tranquillity, — complaints of overstock
in the genteel professions, and of inadequate pay-
ment in almost all of a humbler description.
In a season of peace, salaries or wages are adapted
with scrupulous nicety to the sum necessary for
personal support, and, except in the case of the
inheritors of patrimony, the portion of income,
disposable for purposes of indulgence, is far
from large. Such has long been the case in France,
and most countries of the continent ; such, at
various intervals of the last century, was the case
in our own — a state by no means unsound or
likely to engender future embarrassment, but
leading by very slow degrees to the attainment of
professional rank, or the acquisition of property.
This tranquil condition, this medium between
activity and stagnation, was entirely altered by the
war; the army, the navy, the public offices of
government opened a career to numbers of every
class, and by absorbing a very large proportion of
the candidates for employment, created a cor-
responding briskness in agriculture, trade, and
professions; increasing the wages of the lower,
and the salaries of the higher ranks.
30 The Sources of our Financial Supplies.
*
Capitalists also, a class retired for the most part
from ^active pursuits, partook of the general im-
pulse ; the pecuniary demands of government
were large, and the rate of interest experienced a
general and permanent rise. Occupation was thus
afforded to individuals of every age and of almost
every degree of capacity; many, wrho from defi-
cient activity or mediocrity of parts, would, in a
state of peace, have necessarily remained unem-
ployed, were brought by the war into situations
attended with income ; some in the public ser-
vice, others in private employment, but all in
consequence of the extra demand created by go-
vernment.
Consequent increase of revenue. — All these
changes, in particular the increased call for per-
sonal labour, had a powerful tendency to augment
the relative population of towns, as well by promo-
ting marriage as by drawing to them an extra
share of the country population. Now what is
the effect of an increase of town population on
the productive powers, or, in other words, on the
taxable income of a country ? To form a due esti-
mate of this, we must point the reader's attention
to the passages in subsequent chapters, where, in
treating of the comparative revenue of France and
England, we contrast the dexterity and dispatch
of towns with the slow, inefficient labour of the
country. A transfer of residence from country to
town, leads to augmented ability in the individual,
to the increase of the quantity, the amelioration of
the quality, of his work ; it raises his wages, and,
by enabling him to live better, extends the con-
sumption of articles productive to the exchequer.
To show the progressive augmentation of such con-
The Sources of our Financial Supplies. 31
sumptiqri during the war, we subjoin a table of
excise duties, the operation of which affects, as js
well known, a great variety of articles, including
as well the wine of the higher orders, as the malt
liquor, the spirits, the tobacco consumed by their
humbler countrymen.
Revenue arising from the excise during the follow-
ing years of war, Wing the gross income, before
deducting the charges of collection.
1805. - - .£23,194,000
1806. - 24,081,000
1807. - - - - 24,681,000
1808. - - 25,593,000
1809. (Orders in Council) - 23,471,000
1810. - 25,796,000
1811. - - 26,078,000
1812. (War with America) - 23,532,000
1813. - - 25,272,000
1814. 26,471,000
1815. - 27,207,000
This progressive increase was owing partly to
higher wages, partly to augmented population.
Of the magnitude of the amount paid by the lower
orders, and the consequent increase of revenue
attendant on increase of wages, whether in war or
peace, some idea may be formed from the follow-
ing table.
Abstract of excise and custom duties in 1820, affect-
ing the consumption of the labouring classes.
Malt - ^5,000,000
Beer - - 2,500,000
British spirits 3,000,000
Salt 1,500,000
Tobacco and Snuff - - 3,000,000
Soap . - - - 900,000
32 The Sources of our Financial Supplies.
Leather - ^600,000
Candles .... 300,000
Tea - 3,000,000
Hemp 1 200,000
20,000,000
To which may be added, Timber - 1,000,000
Coals carried coastwise nearly 1,000,000
Total ^22,000,000
These taxes, blending themselves with the price
of the articles, escaped in a great measure the
observation of the consumer, or were overlooked
in the general rise of wages. In like manner the
increase of stamps, heavy as it became, was ac-
counted a secondary object after the great aug-
mentation of price obtained, as the war proceeded,
by the venders of property : the assessed taxes and
poor-rate being undisguised burdens, excited more
animadversion, but they were submitted to as well
from a conviction of their necessity, as from the
general ardour in the contest with France, and her
dreaded ruler.
We may thus safely take for granted that in-
crease of employment, whether arising from war
or other causes, confers increased ability to pay
taxes. The next point is, to explain the sources
of this extended activity, the origin of the funds
that gave it an impulse. These funds arose
chiefly from loans, which, though very different in
different years, averaged, as already mentioned,
the large annual sum of 20,000,000/. This bold
use of our credit, this free draught on our future
resources, was almost all expended, directly or indi-
rectly, in the extension of our domestic industry, and
gave so great a stimulus to it, so large an addition
to the income of individuals, that we need, we
The Sources of our Financial Supplies. 33
believe, seek no farther for the ability to meet
the unexampled demands, in the shape of war
taxes, made by government after 1798, and
still more after 1805. Of these taxes, also, the
product was distributed over the country ; for of
the 4/7,000,000/. sterling, forming the average of
our war expenditure during the twenty-three years,
or rather of the 67,000,000/. forming the average
of our total expenditure, the whole, with trifling
exceptions, was circulated at home.
In what particular mode, it may be asked,
did this annual expenditure chiefly take place ?
In recruiting, clothing, and victualling our mili-
tia, army, and navy ; in the purchase of stores,
the building of ships of war, the repair of fortifica-
tions ; in contracts, pay, salaries, pensions. Even
in that which seemed strictly foreign expenditure,
our subsidies to the continent, and the mainte-
nance of our garrisons abroad, the remittances
took place less in money than in articles of British
manufacture.
This expenditure, as far as it was derived from
money borrowed, or as far as it gave a stimulus to
productive industry, may be termed a premium given
to the existing generation at the charge of poste-
rity : it may be compared to a stream, which,
though proceeding from an unnatural and tem-
porary source, diffused a fertility approaching to
luxuriance, so long as it continued to flow. To
the monied man the war raised the rate of inter-
est ; to the lower orders, the rate of wages ; to the
manufacturer, the merchant, and, in particular, to
the farmer, it raised the profits of stock. Several
departments of business, such as our fisheries, our
trade with the continent of Europe, and that with
D
$4* The Sources of our Financial Supplies,
our West India colonies, were exposed to heavy
losses, and the whole body of fixed annuitants felt
severely the increased expence of living. But these
classes formed the minority of the public : by men
in active life, increase of expence was less con-
sidered than increase of income ; and the general
enhancement of commodities being ascribed to an
abundance of money, was accounted a symptom,
and even a proof of the increase of our national
wealth.
The temporary stimulus afforded to productive
industry by the funding system, though never so
strikingly exemplified before, may, we believe, be
traced in various periods of the history of Europe
during the last two centuries. Was it not conspicuous
in the long contests of the Dutch, first with Spain
and subsequently with France, as well as in every
war that has been carried on by England since the
revolution; though in none of these did the amount
of loans, and still less the amount of war taxes,
bear any proportion to those of the present age.
Was a habit of economy produced by taxation
to be counted among our means of bearing these
burdens ? Taxation, we believe, had, even when
carried to its greatest height, very little effect in
promoting economy on the part of the public j in
stimulating to exertion, it had more, but its great
result was in producing a rise of prices. The
sugar which the planter, on paying a moderate
duty, could have afforded to sell in England at
605, the cwt., was raised by the effect of new taxes
and war charges to 70s. or 75s. Tea which, after
paying half its original cost to the custom-house,
might have been sold at 5 or 6s. the lb., was raised,
inconsequence of being taxed 100 per cent., to
The Sources of our Financial Supplies. 35
7 or 86\ and the salt which (see Sir T. Bernard's
pamphlet on the employment of the labouring
classes in 1817) might, if unburdened, have been
afforded at £l. a ton, was made, in consequence
of the duty, to cost more than twenty times that
price. As the value of money is regulated by its
power of commanding the necessaries, the com-
forts, the luxuries of life ; an augmented money
price became, under such circumstances, indis-
pensable for land, houses, labour, in short for every
thing, except certain manufactures, particularly
cotton, in which the discovery of economical
methods more than counterbalanced the increase
of expence arising from taxes and war charges.
The power of paying taxes during the war, is
thus to be sought, not in retrenchment on the
part of the public, but in an increase of the
general activity, and still more in that which a
writer, (as yet little known to the public,
but to whose works we shall frequently have
occasion to refer, Mr. Simon Gray) terms the power
of " charging and counter-charging ;" the power
of individuals to augment those demands which
constitute their respective incomes ; and thus to
transfer from one hand to another the burden
of a new tax.
Absence of Foreign Competition. — This augment-
ation of charge, this transfer of burden, was fa-
cilitated during the war by various causes, among
which is to be included the existence of similar,
though not equal demands from continental
governments on their subjects. These demands,
in conjunction with the obstructions to intercourse
attendant on a state of war, had the effect of pre-
venting the high prices in England from being
36 Absence of Foreign Competition.
lowered by foreign competition. Had the war
affected only France and England, had the rest of
Europe been exempted from the burdens of great
military establishments, such a system of increased
taxation, or, in other words, such a rapid augment-
ation of prices would have been impracticable :
our countrymen would have emigrated ; capital
would have been sent abroad ; foreign manu-
factures would have been smuggled among us ;
the supplies for the United States and other dis-
tant markets would have been prepared on the
continent. But Holland, the only continental
country possessed of disposable capital, was sub-
jected to great oppression ; while Germany, and in
the latter years of the war, Denmark and Sweden,
were burdened with heavy military charges. Bri-
tish capital was prevented from finding its way
abroad, as well by dread of Bonaparte's despot-
ism, as by the profitable employment afforded it at
home. Smuggling was continued, but only in ar-
ticles (such as spirits, tea, laces,) in which it had
been carried on in peace : the number and activity
of our cruisers prevented its extension, notwith-
standing the additional temptation arising from
our augmented duties.
Our country was thus insulated commercially as
well as physically, and an amount of taxation, a
rise of prices, which at other times would have
been ruinous, were comparatively innoxious when
our neighbours were subjected to heavy burdens.
As soon as this point is clearly comprehended by
the enquirer ; as soon as he becomes satisfied of
the non-existence of foreign competition; he will
find much less difficulty in the solution of our
financial problem. (See Appendix.)
Proportion of our Burdens to our Resources. 37
Proportion of our Burdens to our Resources. —
Our taxation is for the most part levied, not as in
France on production, but on consumption: its
proportion to our means is, consequently, to be
calculated with reference to the aggregate of in-
dividual expenditure. We shall presently have
occasion to observe, that the proportion of such
expenditure which finds its way annually into the
public treasury, has, since 1798, been very large ;
particularly in towns, on account of the great con-
sumption of exciseable articles. Now as the ex-
penditure of government during the war, or, to
speak more correctly, the increased expenditure of
individuals consequent on government disburse,
took place almost entirely in towns, we shall probably
not exceed in calculating that it returned into the
Exchequer a proportion approaching to 33 per
cent., or a third of the amount that had issued from
it. This estimate justifies the following inference.
Total of government expenditure during
the war, exclusive of the sum raised by the
property-tax ^930,000,000
Of which a third, or 33 per cent., paid
back in taxes, formed a sum of 310,000,000
Add the amount of income, or property
tax, paid into the public treasury, exclusive
of the 33 per cent., but defrayed in general
from the extra profits of a state of war 170,000,000
Forming together ^'4-80,000,000
a sum which goes far towards accounting for the
payment of the total of " our supplies within the
year j" or, in other words, towards proving that
after all our boasted sacrifices, our contribution
during the war was little more than a repayment
.of money issued, leaving the chief part of the
D 3
38 Proportion of our
burden to years of peace, in the form of a perma-
nent debt. (See Appendix.)
Thus was carried on from year to year a
most expensive contest, without much pressure on
any part of the public, unless the fixed annuitant,
and without a depreciation of our national capital,
except of that portion (such as the funds, or loans
on mortgage,) of which the value is permanently
represented by money. To many persons, and in
particular to those interested in the expenditure,
this state of things bore a favourable appearance ;
conveying to some the idea of an accumulation
of national wealth, to others the belief that we
finally defrayed our burdens from sources arising
from the war. None were sufficiently aware of
the re-action to be expected at a peace. To foresee
its extent was, we admit, impossible ; but few
of our public men bestowed a serious thought
on the nature of such re-action, while some of
them seemed hardly aware of the possibility of
its occurring ; so limited had been their study of
political economy as a science, so cursory their
examination of corresponding periods of our his-
tory. All that seemed to occur to the most cau-
tious was that our situation was, in some degree,
unnatural j that the great expenditure of govern-
ment was not compensated, on the part of the
public, by economy, or by any great share of
extra-exertion. Hence an apprehension, on the
part of some, that the war must entail a burdensome
inheritance, but at what time, or to what degree,
no one could foretell.
Nor was any endeavour made, either in Par-
liament, or in printed works, to perform a much
easier task ; to draw a parallel between the increase
of our resources and our burdens. This we shall
Burdens to our Resources. 39
now briefly attempt, giving to our statements the
definite form of arithmetical calculation, and re-
ferring for details to the chapter more particularly
appropriated to calculations of national income
and capital. We begin by computing the increase
of our taxable income since 1792, understanding
by taxable income the aggregate income of indi-
viduals accustomed to consume taxed articles.
Conjectural estimate of this aggregate, or tax-
able income, of Great Britain (distinct from Ire-
land) at different periods, from 1792 to 1814,
founded chiefly on the returns made under the
property tax, with the addition of the computed
amount of wages and other incomes, which, though
exempt from that charge, are subject to taxes on
consumption.
Money of Money of dif-
1792. ferent dates
subsequent to
1792.
In 1792 our taxable income
may be computed to have been £125,000,000
In 1806, increase calculated in
the ratio of the increase of the
population, viz. 18 per cent., 22,500,000
147,500,000
Probable addition to national
income from the higher wages
and higher profits of capital in a
state of war, 22,500,000
Total of taxable income in
1806, 170,000,000
which, by a general rise of prices
to the extent of 30 per cent, be-
tween 1792 and 1806, became, in
the payment of taxes and all
D 4
Proportion of our
Money of
1792.
money transactions, equivalent
in 1806, to fully
We shall now apply this mode
of calculation to the last year of
the war.
In 1813 or 1814: Increase of
national income since 1806, cal-
culated in the ratio of the in-
crease of population, 1 1 per cent.
National income in 1806 as
above,
Add 1 1 per cent.
Money of dif-
ferent dates
subsequent to
1792.
£220,000,000
£14-7,500,000
16,500,000
Probable addition to national
income, from the higher wages
and higher profits of capital in a
state of war,
164,000,000
24,000,000
Total of taxable income in
181S or 1814, 188,000,000
Equal, at a rise of prices of
60 per cent, since 1792, in all
money transactions in 1813 and
1814, to
300,000,000
(See the subsequent chapter; also the chapter
on National Capital and Revenue.)
Burdens to our Resources. 41
Our next calculation is —
A comparative Statement of our Public Burdens,
and Taxable Income.
The public burdens include taxes, (with the ex-
pence of collection,) poor-rate, and tithe.
The same re- Our taxable in-
Annual burdens
• . i
duced to a
uniform stan-
come comput-
ed by a uni-
Years.
m the money
of the particu-
lar year.
dard ; viz.
money of the
same value as
form standard;
viz. money of
the value of
in 1792.
1792.
1792.
- .£22,000,000
22,000,000
125,000,000
1806.
60,000,000
46,000,000
170,000,000
1814.
80,000,000
50,000,000
188,000,000
The reduction to a uniform standard is indis-
pensable to a correct conception of the amount of
our burdens and revenue at different periods. By
that reduction, the aggregate of our taxation, poor-
rate, and tithe, amounting in 1806 to the very
large sum of 60,000,000/. is brought, adopting the
proportion of 130 to 100, to 46,000,000/. of the
money of 1792; and the still larger sum of
80,000,000/. raised for the same purposes in 1814,
becomes lessened in the proportion of 160 to 100,
to 50,000,000/. of 1792.
It remains that we bring our reasoning to a
point, by ascertaining the proportion borne at dif-
ferent periods by our burdens to our means. This
is done by a calculation founded on the preceding
tables, but modified by some considerations which
shall be explained in our chapter on National Reve-
nue and Capital. The result is that our burdens
bore to our resources,
42 Proportion of our Burdens to our Resources.
Great Britain distinct from Ireland.
In 1792. a proportion of nearly 18 to 100
1806. of - 27 to 100
1813. or 1814. of - 27 to 100
Great Britain and Ireland.
1822. a proportion of 28 to 100
We shall now turn aside from these complicated
calculations, to fix our attention on that general
rise of prices which took place during the war,
and continued almost without interruption from
1793 to 1814. As this formed one of the prin-
cipal changes in our situation, both individually and
nationally, it is fit that we should investigate it
with minute attention.
CHAP. II.
Effect of War on the Money Price of Commodities.
RESERVING to a subsequent chapter our remarks
on the fluctuations in the value of money from a
remote period of our history, we shall at present
confine our attention to the last thirty years j to
the great rise caused by the war, and to the no less
remarkable fall that has occurred since the peace.
Of the causes of rise during the war, the prin-
cipal were : —
The extra demand of men for government ser-
vice, and the consequent increase of wages and
salaries.
The inadequacy of agricultural produce, conse-
quent on the drain of labour and capital, for the
public service.
The increase of taxation ; and, lastly,
The non-convertibility and consequent increase
of our bank paper.
Of these causes the inadequacy of our agricul-
tural produce, and the non-convertibility of our
bank paper, are reserved for separate discus-
sion : at present we proceed to the effect of the
extra demand of men for government service, the
magnitude of which will best appear from a refer-
44 Causes of the Rise of Prices during the War.
ence to our expenditure, keeping out of view our
annual payments for interest of debt, or the civil
service of government, and fixing our attention on a
Statement of the conjunct expense of our army, navy,
and ordnance, from the beginning to the close of
the 'war, taken from the accounts laid before Par-
liament.
1791.
1792.
1793.
1794.
1795.
1796.
1797.
1798.
1799.
1800.
1801.
1802.
£ 4,226,000
8,750,000
13,511,000
20,247,000
28,751,000
30,165,000
27,606,000
25,982,000
27,257,000
29,613,000
26,998,000
23,121,000
.£253,251,000
1803.
1804.
1805.
1806.
1807.
1808.
1809.
1810.
1811.
1812.
1813.
1814.
1815.
Total nearly
.€21,106,000
30,854,000
36,219,000
37,706,000
36,176,000
39,778,000
42,073,000
43,246,000
47,968,000
49,739,000
54,872,000
60,239,000
43,282,000
543,258,000
800,000,000
The years of peace with which the table begins,
show the very limited demand made on our popu-
lation for military purposes previous to 1793. In
that year our levies took place on a large scale,
although it was not till 179«5, when the number
raised in three successive years were sufficient to
form a great establishment, that our expenditure
became very large. Recruiting continued with
unabated activity during the whole war, until the
signature of the preliminaries of peace, in October,
1801. In 1803, the renewal of hostilities was
attended by a call on our population which led, in
little more 'than a year, to a more numerous esta-
blishment than we had ever had on foot. The do
Causes of tlit Rise of Prices during the H'ar. 45
cisive victory of Trafalgar removed the dread of
invasion; but the continental successes of the
French, the aggrandizing projects of Bonaparte,
were such as to admit of no reduction on our part;
and after 1808, all hearts were united in the cause
of Spanish independence. Hence a continued de-
mand for recruits, an increase of levy money, and
a progressive addition to the numbers on foot, dur-
ing the rest of the war.
What was the proportion of the force in arms to
our population at large? To this, one of the first
questions of a political economist, the answer is,
that the proportion of men in arms was larger in
this country than in any other state in Europe.
In March, 1804, Lord Liverpool, then Lord
Hawkesbury, declared in Parliament, that our
army and navy, including militia, but exclusive of
volunteers, approached to the number of 400,000,
being more than one in ten of the able-bodied
population (then computed at 3,800,000) of Great
Britain and Ireland. France, he added, had at
that time in arms about 560,000 men, or one in
fourteen of her able-bodied population. Austria
had on foot also one man in fourteen; and Russia,
if any dependence was to be placed in the loose
returns of her population, nearly the same propor-
tion. Prussia was the only power whose military
force (about 240,000) bore like ours, the propor-
tion of one in ten to her able-bodied males: but it
was with her a season of peace, and a number of
her soldiers were permitted, by furlough, or other-
wise, to give a part of the year to productive labour.
But this drain of one man in ten was far from
forming the whole demand on our population ;
the arms, the ammunition, the clothing, the stores
46 Causes of the Rise of Prices during the War.
required by government, and constituting a consi-
derable part of the annual sums in the preceding
table, employed in their manufacture a very large
number of additional hands. To this there remains
to add a proportion of our subsidies, we mean the
part supplied to our allies, not in money, but in
stores, the manufacture of which formed, of course,
a farther demand on our national labour. Com-
bining these into one sum, and dividing it by the
number of years of military expenditure (twenty-
three), we find the average annual charge for the
army, navy, and ordnance, to have been thirty -six
millions, instead of the four or five millions a year
prior to 1792.
Observe next, the difference of effect in the sum
raised for this purpose, and that which is levied
for the interest of the national debt. The latter
bore, like all taxation, on the prices of commo-
dities ; but our military expenditure had a double,
or rather triple effect of that nature ; first by a
drain of money, next by a drain of hands, and,
thirdly, by obliging other hands to work for those
so withdrawn. It is only thus that it is possible to
explain either the extraordinary rise of prices in
the war, or their no less extraordinary fall since
the peace.
Effect of Taxation on Prices. — The result, or,
to speak more properly, the avowed tendency of
most taxes, is a direct augmentation of price.
Taxes on commodities are always imposed on the
calculation of being paid by the consumer ; the
supply of any article, whether a luxury, such as
wine and sugar, or a necessary of life, like corn,
salt, leather, being presumed to be in proportion to
the effectual demand, and the tax intended not as
Causes of the Rise of Prices during the JTar. 47
a burden on the producer or vender, but as an
addition to the price paid by the consumer. At
times, however, from the market being overstocked,
no addition takes place ; the price continues as
low as before the imposition of the duty, and the
new burden falls on the producer or seller. Such
was long the case of our West India sugar planters
during the war ; such is, in a great measure, their
case at present : it is the case, also, of a far more
numerous class, our farmers, who, in 1822 as in
1815, are to be considered as paying their taxes
out of their capital. In general, however, there
is made an addition to the price of an article, not
merely to the amount of the tax, but in a somewhat
increased proportion. Suppose a custom duty
paid on an article which, on importation, is sold
to a wholesale dealer of the first class, next to one
of the second class, and, lastly, to a retailer : the
demand of a profit on, or rather of an indemnity for
the tax, is repeated three times ; and, although
these demands are far smaller in degree than has
been asserted by the advocates for the repeal of
taxes, they form, eventually and collectively, a
serious addition to the national burdens ; an ad-
dition which, joined to the charge of collecting
our taxes, constitutes, we believe, a dead loss of
from 12 to 15 per cent, (from six to seven millions
sterling) on the total amount paid by the public.
This loss will be effectually lessened only by the
introduction of a double improvement j a farther
simplification, on the part of government, of the
process of collection, and, on the part of the public,
the adoption of the practice of ready money pay-
ments, so general in Holland, in its day of pros-
perity.
Next, as to taxation in a more direct and mid is-
48 Fluctuation of Prices exemplified.
guiscd form, such as the assessed or the property
taxes. In what manner, it may be asked, do indi-
viduals in general meet burdens of that description?
Is it by self-denial and economy, by increased in-
dustry, or by adding the amount of the tax to the
charge which, in their respective lines of business,
they make on the public ? Economy is practised,
we may be assured, by those only whose income
admits of no increase : augmented exertion is more
natural to our countrymen, and was, doubtless,
made to bear a considerable part in defraying our
war burdens ; but the latter, whenever it was at
all practicable, were charged by the payer on his
customers or connexions ; and the result, as ex-
plained in the last chapter, was a progressive
enhancement not only of commodities, but of
salaries, professional fees, and labour of every
kind.
Such, along with the insufficiency of agricultural
produce, and the eventual derangement of our
paper currency, were the causes of the general
rise of prices during the war. We proceed to
exemplify that rise, and the fall since the peace,
by a reference to real property.
Land. — The farm which, in 1792, let for 170£;
which, in 1803, (see the tabular return of charges
of cultivation in the 'chapter on Agriculture,)
afforded a rental of 240/., and in 1813, of 320/.,
has now reverted, or must, ere long, revert to
Houses. — The house which, in 1792, let for 50/.,
in 1806, for 65/., and in the latter years of the war,
for 70/. (the rise being less great in houses than in
land), lias now reverted to a rent of 65L Its value
as a purchase, originally l,000/«, raised towards
Fluctuation of Prices exemplified. \\\
the middle of our long contest, to 1,SOO/., ami
eventually to 1,400/. or 1,500/., is now brought
back, or likely to be soon brought back, to 1,200/.,
a sum which, in the scale of general expenditure,
is or will soon be equal to the 1,000/. of 1792.
Land and houses have thus maintained a nearly
uniform value under a very different amount of
money rent. The same is applicable to the far
greater part of income, whether arising from pro-
perty or labour \ from capital vested in trade, ma-
nufacture, or agriculture; from wages, salaries, or
professional charges, the sum paid having regu-
larly increased as its value diminished.
Money property, such as the stocks, or loans on
mortgage. — Here a very different scene opens. A
sum lent on mortgage, which, for facility in calcu-
lation, we shall suppose to have been 3,200/.,
yielded throughout the war a regular 5 per cent,
of interest, but the 1 GO/, received from it, became,
towards the middle of the war, equivalent to only
130/., and, towards its close, to little more than
100/. This formed a heavy .reduction ; but it is
fit to add, that the continuance of peace after 1792
would have produced a reduction of a different
kind, lowering the rate of interest to 4, 3%, and
eventually, perhaps, to 3 per cent. Since 1814,
the reaction in the value of money has rendered
the 160/. of interest equivalent to more than 130/.
of the money of 1792. To what proportion of the
national income does this calculation apply, or, in
other words, what is the amount of fixed annuities
in the country, excluding wages, salaries, stipends,
and all payments which may vary from year to
year ? We are inclined to compute this amount at
50,000,000/. annually, a sum which is at present,
E
50 Effect of a general rise of Prices.
and was during a great part of the war, nearly one-
fourth of our total national income.
Injurious effect of high prices. — The pernicious
tendency of fluctuation in the value of money is
generally admitted, but that of permanent en-
hancement is less understood : it is even the notion
of a number of writers, and a still greater number
of practical men, that taxation, though the great
cause of enhancement, is productive of no injury
in a public sense, because the money thus collected
is almost all expended at home. This idea has
induced the writer already mentioned (Mr. S.
Gray), whose views, sound and liberal in several
respects, are in others greatly impaired by over
confidence, to give our national debt the conve-
nient name of " public service capital." " The
payment of the interest is," says Mr. Gray,
in the work entitled, " All Classes productive of
National Wealth," (p. 136.) " no disadvantage :
the public is just where it was before : they have
had thirty millions charged on them, for the inte-
rest of the national debt, and they have charged
thirty millions in return." — All this might be
true were the British Islands a distinct planet, or
were they separated from the rest of the world by
a " wall of brass ten thousand cubits high :" but,
doomed as we are to intercourse with our conti-
nental brethren, does not an excess of taxation
place us under a great relative disadvantage in a
competition with foreign manufacturers? And,
before the fall in our corn market, was it not to
be apprehended, that our capitalists might transfer
to less burdened countries, that money, that ma-
chinery, and, in part, those hands, which have so
Kffect o/ a general rise of Price*. .51
effectually conduced to make us support our finan-
cial pressure ?
A writer of great notoriety, without carrying
his doctrine so far as Mr. Gray, expresses
in more places than one, an opinion that high
taxation imposes on us no disadvantage rela-
tively to our neighbours, or, to use his own words,
that " a generally high price of commodities in
consequence of taxation would be of no disadvantage
to a state."* This opinion Mr. Ricardo repeats in
another passage (p. 305.) where he says, that the
" amount of taxes and the increased price of labour
in a country does not, according to his ideas,
place it under any other disadvantage with respect
to foreign countries, except the unavoidable one
of paying these taxes." But he soon after makes
a highly important qualification, by admitting that
these charges render it the interest of every con-
tributor to " withdraw his shoulder from the burden,
and, in many cases, to remove himself and his
capital to another country;" a course replete with
the most injurious results.
We shall suppose, for the sake of illustration
that the whole of the civilized world, the whole of
the states who carry on a commercial intercourse
with each other, are simultaneously involved in
war and obliged to impose on themselves burdens
which bear the same proportion to the taxable
income of each : — the consequence would be a
concurrent and uniform rise of prices ; and a con-
test, after lasting twenty years, might terminate
without any relative disadvantage to any of the
belligerents, as far as regarded their finances, or
the state of their productive labour. But in every
war there are certain states, whose rulers have the
* Ilicardo on Political 'Economy. 2d edition, p. 28'*.
E 2
52 Effect of a general rise of Prices.
prudence to avoid participating in the unprofitable
struggle, and who secure to their subjects the ad-
vantages of neutrality, along with an exemption
from the burdens entailed on their neighbours.
Such, in the present age, was the case of Denmark
until 1807 • such also was for a time, the case of
Sweden, Prussia, and, above all, of the United States
of America.
Holland, a country particularly inclined to a
pacific policy, has, from her geographical position,
been unavoidably involved in most of the great
contests which have taken place since she became
a power, so that during the 17th and 18th cen-
turies, her history exhibits hardly any period of
exemption from them, except in the war of 1756.
We, whether from necessity or from belligerent
ardour, have so seldom enjoyed the blessing of
neutrality, that to trace it in our history, we are
obliged to recur to the reign of James L, who,
whatever might be his weakness in other respects,
stedfastly maintained peace amidst the convulsions
of Germany, the dissensions of France, the pro-
longed hostilities of Spain and Holland. A strik-
ing illustration, not indeed of neutrality but of
that prudent mode of warfare which secures na-
tional independence, without aiming at foreign
acquisitions, is to be found in the troubled reign of
Elizabeth, and the wise administration of Cecil.
Prices on the Continent. — In how far, in the pre-
sent age, have the other countries of Europe par-
ticipated in those fluctuations of money which
among us have reached so extraordinary a length ?
This question is of no easy solution as well from
want of documents in countries which had then
no representative assembly, as from a depreciated
Effect of a general rise of Prices. 53
paper having been current in almost every part of
Europe. France, the only state that has equalled
us in the duration of her wars, exhibits a remark-
able contrast to us in the extent of her financial
burdens. Her revenue, amounting in the begin-
ning of the revolution, to about twenty-two mil-
lions sterling, (see the Report of Camus to the
National Assembly, in July 1790), was never in-
creased by more than the half of that sum ; while
our sixteen millions of 179#, became forty-five
millions in 1804; sixty millions in 1808, and
nearly seventy millions in 1814. In fact, in the
early part of the revolutionary war, the collection
of revenue in France was. considerably under
twenty millions ; the wants of government having
been supplied by the emission of assignats during
four years of emergency, (1792. 3. 4. 5.) and
afterwards in a considerable degree, by contribu-
tions from conquered territories. The amount
emitted in the form of assignats admits of no defi-
nite calculation, the value of that government
paper having fallen rapidly, and having been at
last reduced to a nullity. But if we compute at
two hundred millions sterling the amount of
public sacrifice from the assignats, and if we add
for the bankruptcy committed in regard to two-
thirds of the public debt, the forced loan of 1797*
and the augmented taxation of the latter years
of Bonaparte, two hundred millions more ; and,
finally, if we add a national loss of one hundred
millions, consequent on his inauspicious return
from Elba, and the invasion of 1815, we make in
all a pecuniary sacrifice on the part of France, of
five hundred millions sterling, over and above the
twenty-two millions of annual expenditure neces-
sary under a peace establishment.
E3
.54 Fffect of a general rise of Prices.
But the political strength of our southern neigh-
bour lies less in money than in men, and that
forced annual levy which would be so indignantly
received among us, and so subversive of the
resources of a commercial and manufacturing
country, proved the most effectual means of
drawing forth the power of France. In this
respect accordingly her sacrifices have been very
great, the number of men who fell in the long
struggle from 1792 to 1815, estimated, on a mode-
rate computation, at a million and a half, being
probably more than three times as many as was
lost by our country after every allowance for the
destructive effect of tropical climates. In another
respect also, the neglect of education and post-
ponement of the choice of a profession attendant
on the Conscription, as well as the loss of time to
those who escaped the sword and resumed a
pacific occupation, form an amount of national
detriment which may very fairly be put in the
balance against the vast loss sustained in this
country by the transition from war to peace.
The Netherlands, subjected during twenty years
to the sway of France, and during a part of the
time to the Conscription, were also exposed to
heavy losses. If less great than those of France in
men, they were larger in a financial and commercial
sense, as well from augmented taxation as from
interrupted intercourse, and the many abortive
attempts made, during the enforcement of the
prohibitory decrees, to produce substitutes for
coffee and other articles, the growth of a tropical
climate.
Of the other European powers the chief belli-
gerent was Austria, whose pecuniary sacrifice was
Effect of a general rise of Prices. 55
lessened by our subsidies, but whose loss in men
amounted perhaps to the half of that of France.
Next came Prussia, Spain, Russia, Sweden, in whose
case the duration of suffering was less, but who were
all doomed to feel the destructive ravage of war and
invasion. A pressure of a more lasting kind, we
mean that which is attendant on the maintenance
of a large standing force, extended to every state,
great and small, on the continent, from 1792 to 18 14.
Their taxation consequently increased, and the ge-
neral demand for men was followed by a general rise
in the price of labour. The impracticability of
effecting loans prevented that stimulus to produc-
tive industry, that drain on the future in favour of
the present which took place among us to so great an
extent : nor was there in any part of the continent
a continued inadequacy of agricultural produce.
Accordingly, though prices on the continent be-
came higher in war than they had been in peace,
though during the one period the demand for
labour was brisk, in the other languid, the degree
of difference was much smaller than with us ; and
were we, for the sake of arriving at a definite
estimate, to hazard a conjecture of the difference
between the present prices on the continent and
those of 1792, we should pronounce the former from
10 to 15 per cent, higher. This is somewhat more
than half the enhancement that we find in England,
comparing our present prices to those of 1792.
This excess on our part in the ratio of enhance-
ment, added to a similar excess in prices previous
to 1792, makes a total difference between this
country and the continent of from 20 to 30 per cent.
The leading causes of this are our heavy excise
duties, the larger size of our towns, and the occa-
sional operation of our corn laws. The balance
against us would be still greater, were it not in a
oG Effect of a general rise of Prices.
considerable degree counteracted by the cheapness
of fuel and of several articles of manufacture, in par-
ticular hardware, in which our command of capital,
our inland navigation, and our machinery, afford
us a considerable advantage over the continent.
Rise of prices apparently indicative of prosperity.
An increase in the money value of commodities,
of land, houses, and stock in trade, accompanied
by a general augmentation of salaries and wages,
suggested during the war the idea of general
prosperity, of increase of wealth arising from or
denoted by an increase of our circulating medium.
How far this was nominal has already been in some
measure shown: the augmented price of com-
modities, of land, houses, merchandise, required,
to represent it, a larger sum of money, but that
money was of less value. Or, if we admit that the
general briskness caused by the demands of
government led to an actual rise of prices, a rise
over and above that which was requisite to meet the
alteration in the value of the currency, it is fit at
the same time to recollect that the fixed money
property of the country, such as the stocks and
loans on mortgage, all underwent depreciation.
What then was the real result? That, on the
one hand, the national property was lessened by
the great additional charge arising from the war :
on the other, it was augmented by the general
progress of improvement and increase of popu-
lation. There were, however, no such limitations
in the estimate of the public, or, as far as we can
-perceive, on the part of ministers: both con-
fidently inferred prosperity from rise of prices, and
appear never to have suspected that such rise was
as much an indication of increase of burden as of
•an increased demand for labour.
I'll] ccl of a general rise of Prices. 57
What a train of misconception, what a series of
sanguine and fallacious notions would have been
prevented, had the public been earlier aware of
these simple truths ! During the war, the rise of
price was so regular, and of such long continuance,
(from 1793 to 1814), that the majority of the pre-
sent generation took for granted that it would be
permanent, ascribing it either to the natural course
of circumstances, or to causes not likely to be
suddenly altered, — such as the unknown gains of
our foreign commerce ; the influx of the precious
metals from America, or the increase of our cir-
culating medium by the issue of bank paper.
But in this, as in other points, the return of peace
has undeceived us ; it has shown that the influx of
specie was over-rated; that the effect of bank issues,
though at one time considerable, was temporary,
and that the origin of high prices is to be sought
in less welcome causes. Two of these, the demand
for men for the public service, and the insufficiency
of our growth of corn, have for some time ceased
to operate, but the third, certainly not the least
considerable, we mean taxation, continues to press
on us. On calculating, as we propose to do in a
subsequent chapter, the total addition made to
our taxes and poor-rate since 1792, we shall find
them bear a proportion of from 10 to 12 per
cent, on the taxable income of the nation, which
necessarily implies a correspondent addition to
our prices, and accounts for a material part of the
difference in the value of money between the
present time and 1792.
What, it may be asked, was the effect of a rise
of prices on our public revenue ? Like all
artificial changes it was productive of little
permanent effect: it increased the numerical
58 Effect of a general rise of Prices.
amount of the revenue, but it was ultimately followed
by a corresponding drawback in augmented expendi-
ture ; enhancing stores, salaries, the pay of the
army and navy, in short, almost every object of
government disburse. On the cessation of the
war, the picture was completely reversed, and
our debt, from the rise in the value of money,
has risen almost every year in its pressure.
Calculating the debt contracted during the whole
war at ^460,000,000 ; and dividing the periods
with reference to the relative rise of prices, or, in
other words, depreciation of money, we shall find
that the smaller part of this debt was incurred when
money was more valuable than at present, the larger
when money was more depreciated. This point,
so repeatedly brought forward in parliamentary dis-
cussions, shall be treated on a subsequent occasion :
at present we have merely to remark that, as far
as regards the debt contracted in the present age,
the public have been considerable losers by the
fluctuation of prices.
Conclusion. — We have now enumerated the
chief causes, which tended to produce the rise of
prices during the war. To define the amount of
that rise either in specific articles or specific years,
would be a task of great labour and nicety : the
only person who attempted it was the late Mr.
Arthur Young, of whose calculations we shall treat
afterwards. If, for the sake of conferring some
degree of precision on an obscure subject, an
attempt be made to divide the progress of enhance-
ment into periods, we may consider the war as
having produced half its effect towards the year
1806, viz. that the rise of prices taken in the
most comprehensive sense, whether of provisions,
uj'ti geveral rise of Prices. ->!)
clothing, labour, or professional charges, was in
that year fully SO per cent, above the prices of
1792. From 1806 to 1813 the rise was more
rapid, in consequence of the double effect of a
non-convertible currency, and extended military
operations, so that in 1818 and 1814 the enhance-
ment was not short of 30 per cent, on the prices of
1806, or of 60 per cent, on those of 1792. Peace
opened a very different prospect: the reduction
began very early, but the intervention of a bad
crop, (1816) and of a year of overtrading, (1818)
prevented the fall from being general till 1819,
and, in some measure, till the latter part of 1820 :
at present prices, stated in a comprehensive form,
and with reference to the expenditure of the lower
as well as the higher classes, are or will soon be
40 per cent, below those of 1813, leaving them
still about 20 per cent, above the currency of 1792.
This is, of course, to be understood of prices col-
lectively ; for particular heads of expenditure, such
as cotton and hardware goods, are lower than
before the war, while in salaries and wages the
difference, as yet at least, is considerably above our
supposed average.
Summary. —From 1792 to 1806, 14- years, a rise of 30
per cent.
From 1806 to 1814, 8 years, a further
rise of 30 per cent.
From 1814- to 1822, 8 years, a fall of
nearly 4-0 per cent.
Of the nature of our prospect, whether prices
in future are likely to rise or fall, we shall treat
in the chapter appropriated to such inquiries. At
present, without professing to speak with confi-
dence on a subject on which confident calculation
60 Effect of a general rise of Prices.
would be ridiculous, we shall remark, generally,
that on the one hand, all those improvements in
machinery in which the age is so prolific, are con-
ducive to cheapness, and that our increased inter-
course with the less heavily taxed countries of the
continent will in some degree tend to the same
result : while, on the other hand, may be urged,
the probability of a larger supply of metallic cur-
rency, by the application of machinery to the
American mines ; and perhaps the prospect of a
more general substitution of paper for coin in
the larger payments throughout the continent of
Europe.
CHAP. III.
Consequences of the War exemplified by the transition to
Peace.
JN o period of our history affords an example of a
change so sudden and so extensive as that which
took place in the state of our productive industry
after the peace of 1814. For the relinquishment
of foreign colonies, and for an active rivalship in
manufacture, on the part of the Continent of
Europe, the public were prepared ; but they had,
in a manner, lost sight of the great difference be-
tween government expenditure in peace and war ;
and the few calculators who took this difference
into account, imagined that the diminution of
home business would be balanced by the demand
for newly opened markets in America and Asia.
These persons were by no means aware either of
the magnitude of our circulation at home, arising
from war expenditure, or of the substantial dif-
ference between an assured payment in England,
and the hazard attendant on transactions with
distant countries. Many anticipated a partial re-
duction of wages, but not a general want of work ;
a diminution of mercantile and manufacturing pro-
fit to a certain extent, but in no degree proportioned
to that which took place. Yet the years of peace
(>2 Causes of Distress since the Peace.
have been marked by no calamity of a general
nature ; by no such bankruptcy as the South Sea
or Missisippi scheme ; by no territorial cessions,
like the relinquishment, at the peace of 1783, of
our North American provinces ; by no insurrection
in our colonies ; no successful rivalship on the
part of competitors either in manufacture or navi-
gation.
Causes of our Distress. — What, then, have been
the causes of our great and unexpected em-
barrassments? Not a reduction of our means
considered physically, or intrinsically, but a gene-
ral change in the mode of rendering them pro-
ductive ; a sudden removal of the stimulus arising
from the war. In no former contest had our military
establishments been carried to such a height : the
number of our militiamen, soldiers, and sailors,
discharged, amounted to between two and three
hundred thousand, of whom many returned to
productive labour, while a considerable proportion
of our manufacturers, perhaps not less than one
hundred thousand, ceased to receive employment
in preparing clothing, arms, and other military
stores. Hence a rapid overstock of manufactures,
and a no less rapid fall of wages. Agriculture,
though resting apparently on a firmer basis, re-
ceived an early shock in consequence of the extra-
vagant expectations of certain landholders, who,
by urging a corn law such as government could not
grant, caused a year to elapse without an alteration
in the existing limit : imports accordingly took place
on a large scale, and our farmers, instead of de-
scending gradually, were exposed to all the evils
of sudden depression. On the other hand, our
Causes of Distress since the Pence. (i;3
consumption, whether of agricultural or manufac-
tured produce, experienced no absolute diminu-
tion ; for our numbers, as was shown by the ex-
tent of new buildings, were annually on the
increase : but partly from the economy introduced
by altered circumstances, partly from other causes,
the increase of consumption did not equal the in-
crease of supply, and a general fall of prices
became unavoidable.
Similar causes of embarrassment were unfortu-
nately in operation on the Continent of Europe.
In former wars the evils of transition had been felt
in few countries, and to a comparatively small ex-
tent: but in 1813 and 1814, almost all Europe
had been in military array, and every country felt
the sudden change from disembodying of armies,
cessation of government purchases, and an over-
stock of productive labourers. Add to this, that
our greatest customers, the United States of Ame-
rica, had suffered so severely from the stoppage of
their navigation, and the loss of their neutral charac-
ter, as to be far less able to pay for our goods than
before our ill-fated Orders in council. Our foreign
trade, though not diminished, and even partially
increased in amount, failed, from irregularity in
the payments, to prove an efficient source of relief ;
and our distress was aggravated in no slight degree
by the absence of many of our countrymen of the
upper and middling classes, who, whether as tra-
vellers or as residents on the Continent, incurred
an expenditure of 5 or 6,000,000/. annually abroad,
.at the time it was most wanted at home.
To show the magnitude of the transition from
war to peace, we add a brief comparison of the
sums expended by government in the five last
years of the war, and the five first years of peace :
64 Causes 'of Distress since the Peace.
Years of War.
1811 - 92,200,0007. 1814 - 117,000,0007.
1812 - 103,400,0007. 1815 - 110,000,0007.
1813 - 121,000,0007. Average 108,720,0007.
Years of Peace.
1816 - 72,000,0007. 1819 - 59,000,0007.
1817 - 66,300,0007. 1820 - 61,000,0007.
1818 - 67,000,0007. Average - 64,660,0007.
Peace thus caused an immediate reduction of
nearly fifty millions in the amount of the money
distributed by government to pay employment, or,
as it is termed by political economists, to stimulate
productive industry. During the war all our
establishments, private as well as public, had been
formed on a large scale, a scale that supposed a
power of demand, a capacity of payment much
greater than was found to exist after the peace.
This was the case in regard not only to great
offices, but private establishments of the most dis-
similar character; manufactures, mercantile houses,
seminaries of education, and a variety of under-
takings, almost all of which, whether in the metro-
polis or provincial towns, were adapted to a com-
munity increasing not only in its numbers, but in
its means of expenditure.
The means by which we were enabled to pay
such heavy contributions during the war have al-
ready been explained. Exempt from continental
competition, the public, or at least four-fifths of the
public, had at that time the means of indemnifying
themselves for their taxes by an increased rate of
charge. This was the case of the land-holder,
the farmer, the owner of houses, the receiver of
10
(V///.sv.v q/' Disfresx since the Peace. i>~>
tithe : it was the case, likewise, of persons exer-
cising professions, of those receiving salaries, and
of the very numerous class, whose dependence is
on wages. The only persons precluded from this
advantage were the fixed annuitants, landholders
whose property was let on lease, and, for a time,
the military and civil servants of government.
Since the peace all has been reversed: agricul-
turists, merchants, manufacturers, mechanics, have
all fallen from their Vantage ground, and prospe-
rity has been confined to the comparatively small
number of persons with fixed incomes — the persons
who had experienced privations during the war.
The extent of our suffering might have been in
some degree lessened, had our real situation been
earlier known, or had it not undergone consi-
derable fluctuation in the years that have elapsed
since the peace. The year 1814 produced two
great results ; a fall of corn, and a reinstatement of
the value of bank paper. Both continued during
1815 and 1816, but the bad harvest of the latter
year renewed the operation of our corn laws, and
being followed by a revival of trade and manufac-
ture, accustomed us anew to high prices, gave a
temporary increase to the revenue, and suspended
the measures that might otherwise have been taken
for a general adaptation of our burdens to our
means; we mean a reduction of salaries and those
other incomes in regard to which, from the sums
being previously fixed, the course of circumstances
has not had free operation. Our second period of
distress (beginning in 1819) thus came on us as
unexpectedly as the first, and we are now, in the
eighth year of peace, discussing those points which
it had been of infinite importance to us to have
t% understood from the moment that the overthrow
i eduction & National Income.
of Buonaparte opened the prospect of a great and
general change.
After these preliminary observations we proceed,
as in the preceding chapter, to exhibit our results
in the form of arithmetical calculation.
Confuted amount of the taxable income of the nation
at two distinct periods of war and peace, viz.
1813 and 1822; making in a third column an
addition for the increased value qf money in 1822. :
The samebrought
into money of
1815 ; being our
Computed Computed taxable income in
Amount in Amount in 1822,after adding
1813. 1822. a third for the in-
creased value of
money since the
peace.
Great Britain, distinct from Ireland.
(See property tax returns for 1812 and 1815.)
Rent of land
Tithe
Annual income or profit
of farmers subject to
property tax
This was exclusive
of nearly ^20,000,000
exempted from the
tax, (see the returns
for 1812,) so that the
reduction to fanners
is very great
Rent of houses
Annual profit of trades
and professions •
Wages in agricul tu re, ma-
nufacture, and every
department of industry
Interest of the public
funds
Conjectural amount of
interest of money lent
on private securities
30,000,000
4,700,000 4,000,000
2 1 ,000,000 1 2,000,000
40,000,000
5,000,000
16,000,000
1 0,000,000 1 0,000,000
30,000)000 22,000,000
100,000,OOO 8 0,QOO,OOO
5 1 ,3OO,OOO 50,000,000
•jo,ooo,ooo 20,000,000
21,000,000
29,000,000
107,000,000
40,000,000,
26,000-,000
Reduction of National Income.
•J7
Government expenditure
at home, exclusive of
the portion already in-
cluded under trades and
professions; estimated
conjecturally at -
Total for Great Britain
Ireland, conjectural a-
mount of her taxable
income -
Total
The same brought
into money of
1813; being our
Computed Computed taxable income in
Amount in Amount in 182*, after adding
1813. 18-22. a third for the in-
creased value of
money since the
peace.
38,000,000 16,000,000 21,000,000
304,OOO,OOO 230,OOO,OOO 305,OOO,OOO
35,000,000 25,000,000 33,000,000
339,000,000 255,000,000 358,000,000
To understand this table thoroughly, requires
no small share of attention : one source of per-
plexity, indeed, is removed by reducing our present
currency to the value of that of the last year of the
war; and the reader, in comparing the years J 813
and 1822, may with confidence pass over the second
column, and confine his attention to the sums ex-
pressed in the first and third. But this is not all :
the gross produce of a country increasing in pro-
portion to its population, our national income, had
our progress been regular, ought to have followed
the same, or nearly the same rule, and to have
exceeded that of 1813 by 14 per cent., the amount
of increase in our population. This, however, is
far from being the case, the augmentation of
national income from that source having beeii
unfortunately balanced by the great diminution
which has taken place in wages, salaries, and profits.
To bring this reasoning to the test of arith-
metical statement, take the national income
^255,000,000
u8' llt-fhiction aj National Income.
Add to it a third for the increased value of
85,000,000
Farther, for an increase of income pro-
portioned to the increase of population,
viz. 14- per cent., in the nine years since 1813 4-6,000,000
In all 386,000,000
Deduct, on the other hand, for the general
diminution that has taken place in the in-
come of individuals, whether arising from
wages, salary, or profits; a conjectural
estimate of - - 4-8,000,000
Remainder, forming the amount of the third --
column ..... - ^£338,000,000
All this will be found to be implied, if not ex-
pressed in the preceding table, which, without
having a claim to minute accuracy, possesses the
advantage of giving a definite form to that which
is otherwise replete with uncertainty. Thus, in re-
gard to the complicated question of wages, we
find that if, conforming our calculation to our
population returns, we make in 1822 an addition
of 14- per cent, to the number of persons earning
wages in 1813, and assume the reduced sum of
^80,000,000 as the aggregate of their receipt in
1822, the result is an apparent fall of more than
30 per cent.; but this fall becomes modified
to 8 or 9 per cent., after we take into account
the increased value of the money in which wages
are now paid. A similar calculation will be
found applicable to most other classes.
The conclusion, therefore, is, that after making
allowance for two important points, the diminution
of our profits, and the increase of our numbers
since 1813, the amount of our national income
may at present be considered nearly on a par with
that of the last year of war. In what then consists
the difference so remarkable in the relative pros-
perity of the two periods ? First, in our having a
Reduction nf'Xntiojutl Income. 69
population of nearly one-seventh more to maintain ;
and next, in the very unequal operation on different
classes, of the changes that have taken place since
the peace. A reduction of the income of the
community to the extent of a seventh, or 14 per
cent., would not, had it been equal and general,
have proved disastrous: it would have necessitated
a diminution of expense, and have given a general
check to sanguine expectation, but could never
have been the cause of severe distress. But the
transition unfortunately took place in a very
unequal manner, the improvement in the situation
of certain classes, annuitants in particular, having
been the indirect cause of augmented pressure on
others. Thus in the case of merchants, after
allowing, on the one hand, 14 per cent, for their
increased numbers, and on the other, giving them
the benefit of the increase in the value of money,
the diminution of income appears to be 20, instead
of 14 per cent. : in the case of farmers it is above 50
per cent., and if the landholders do not as yet
reckon an equal reduction, the failure of rents is
likely to affect them very severely during the
present and ensuing year. The case of the lower
orders, or the great mass of the population, is hap-
pily very different, the counteracting power of the
rise of money improving the situation of many,
and reducing the loss of those to a slight amount,
who have undergone -a diminution of wages.
They who, during the war, received 20s. a week,
and at present only 14s. find the smaller sum avail
them in their purchases as much as the larger during
war. The situation, therefore, of the lower orders,
viewed collectively, is by no means impaired; hard-
ship, where it exists, has arisen from inequality in
the transition, particular classes, principally manu-
facturers, having been exposed to severe suffering.
F 3
70 Reduction of National Income.
but mechanics, and those whose wages have de-
creased slowly, are more comfortably circumstanced
than during the war.
In the situation of fixed annuitants, we find the
reverse of the picture; but it is fit to remark that
their increase of income, apparently exceeding
SO per cent., becomes virtually reduced to 15 or 20,
when we take into account the additional numbers
that are now to be supported out of the same sum
of money. In regard to houses the case is some-
what different, the income being kept up by the
great addition that has been made to our stock of
buildings.
In what order or succession did these reductions
of income take place? First, in the army, the
navy, and the classes, such as contractors and
manufacturers, who derived their support from
government: the agriculturists followed almost
immediately, in consequence of the unchecked
import of foreign corn during 1814. Trade and
manufactures though, as we have already seen,
undiminished as far as regarded export, experienced
a surprising decrease at home, from the cessation
of government purchases, and an overstock of
hands from the discharge and non-enlistment of
men for the army and militia. Among the liberal
professions, the medical suffered a direct surcharge
from an obvious cause : the same held in regard to
the civil service of government, and if in the law
and the church, the overstock has been less im-
mediate, it has not been the less certain, so much
does stagnation of demand in any of the great
departments affect the community at large.
Reduction of public burdens. — Since the peace,
the numerical amount of our burdens has been
considerably diminished, and it is natural to ask
Reduction of National Income. /I
in what manner the decrease affects our comparison
of the years 1818 and 1822. The repeal of the
property tax along with the reduction of the poor
rate, the duties on salt, leather, &c. form certainly
a large apparent diminution ; but it is balanced,
or more than balanced, by the rise in the value of
money, since 67,000,000/. form at present a pressure
of greater weight than 80,000,000/. at the close of
the war.
Effect on our public debt of the late rise in the
value oj money. — We come now to a circumstance
in the series of our transitions, which, without
increasing the arithmetical amount of our burdens,
has rendered their pressure at the present moment
peculiarly heavy. To comprehend this fully, the
reader should bear in mind, that government
stands permanently in the capacity of a debtor;
that its responsibility is represented not in land,
houses, or what is technically termed real property,
but in money ; and that whatever raises or lowers
the value of money, increases or diminishes the
pressure of its debt. The interest of the portion
of the public debt, existing prior to 1792, is about
^9,000,000, to pay which required, during the
long depreciation of money attendant on the war,
no greater drain on the national resources, than
the payment of 7 or ,§£8,000,000 previous to
1793. This fact, long known to our finance
ministers, formed during a time the basis of very
confident calculations : so long as high prices were
kept up, so long did our leading men at the
Treasury and in Parliament imagine, that the
pressure of the debt contracted during the war,
would be alleviated by the continued depreciation
of money. On the return of peace, a degree of
F 4.
72 Reduction of National Income.
re-action or rise in the value of money was an-
ticipated ; but in the opinion of the public, as of
government, this re-action was likely to be slight.
Had such proved the case ; had the price of corn
been kept up both here and on the continent, our
national burdens would have been comparatively
light: they would not, even reckoning the corn
laws in some measure as a tax, have exceeded the
proportion of 26 or 27 to 100, or of 80 millions of
burden to the 300 millions, which, in that case,
would probably have formed the national revenue
of Great Britain and Ireland. This proportion
would have progressively decreased as our numbers
augmented, and we might have considered the ex-
pense of the contest as in a great measure liquidated
from two sources, the extra profits of labour and
capital which had supplied our war taxes, and the
depreciation of that money debt, which represented
the undischarged burden. But all such calcu-
lations have been disappointed: re-action has taken
place on a large scale: the thirty millions' interest
of our debt are equal in pressure to forty millions
in 1813 : and without experiencing any direct
loss, the Treasury has been subjected to serious
embarrassment from the general reduction of rent,
salaries, wages, in short, of every thing except
fixed money income. It is this which, of late
years, has rendered the payment of taxes so
difficult, and augmented so greatly the proportion
of our burdens to our means.
Has this change been accompanied by any
circumstances of alleviation? In private life we
have for some time experienced considerable relief
from the reduction of our expenditure; but what
is the situation of government? It feels the pres-
sure on more than two-thirds of its disburse ; the
Reduction of National Income. 73
benefit on less than one-third. The former
consist of interest of debt, military and naval
pay, pensions, half pay, salaries, and retirement
allowances, all of a fixed amount in money, and all
virtually increased as money has risen. On the
other hand, a reduction of government charge
from rise of money, was, till very lately, ex-
perienced only in the victualling of our navy,
the purchase of stores, and in a portion of the
miscellaneous services. (See in the Appendix, p. x.
an estimate of the loss arising from the War.)
These discoveries constitute, in some measure,
the denouement of the mysterious financial drama
that has been acting during the last thirty years.
Our power of pecuniary contribution so often and
so loudly ascribed to augmented wealth, and to
generosity in its sacrifice, may now be, in a great
measure, traced to causes of a humbler character ;
to an increase of our productive industry, founded
on loans, and to a great, but temporary rise of prices.
Both of these remarkable features in our situation
were expected by the majority of the public, and
by our rulers, to be permanent; but the rise of
prices has disappeared, and to the extension of our
productive industry, circumstances have, of late
years, been very unfavourable. Add to this, that
though the prospect of continued peace has pro-
duced a radical change in our situation, government
have not brought forward, perhaps not yet devised,
any new or comprehensive measure of finance
founded on the change: they have as yet made no
attempt to turn to account that which constitutes
the great line of distinction between us and our
continental rivals — a rapid increase of population.
In fact, we have as yet made little progress towards
relief, unless we account as such a more correct know-
ledge of our situation; a discovery of certain errors ;
yi Conduct of Public Men.
a perception of the transient nature of the aids on
which we relied during the first years of peace.
Have our public men, since 1793, understood
our finanical situation ? — After ascertaining the
existence of such general misapprehension, it is
impossible to avoid asking whether several impor-
tant circumstances in our situation and prospect
have not been unknown to our political guides.
Were they aware during the war, that the extension
of our productive industry was, in a great degree,
artificial, and must decline with that government
expenditure which called it forth? In regard to
the interest of our public debt, our pensions and
other fixed payments, did they or did they not
foresee that, on the cessation of this artificial
stimulus, the natural course of circumstances
would cause a rise in the value of money, and
a consequent increase of pressure? To what
degree do these considerations affect the reputation
of Mr. Pitt, the leader in that course of policy,
which, in a military sense, produced so brilliant a
result, in a financial so much embarrassment?
That Mr. Pitt was at first averse from the war
with France, is apparent, from several circum-
stances, as well from the declaration of respectable
writers*, as from the undeniable fact, that a state
of war was altogether contrary to his plans for the
reduction of our public burdens. That, after the
campaign of 1794* had disclosed the weakness of
our allies, and the strength of France, he lamented
our involving ourselves in the contest, there seems
little reason to doubt: but when fairly engaged in
it, when the resources of the country were called
into full activity, it accorded with his bold and
* Nichols' Recollections of George III. and J. Allan's Biogra-
phical Sketch of Fox, in Napier's Supplement to the Ency-
clopaedia Britannica, page 361.
Conduct of* Public Men. 75
confident character, to maintain the struggle, in
the hope of recovering the Netherlands so unfor-
tunately lost. Hence a continuance of the contest
after the defection of our allies and the financial
difficulties of 1797; hence those war taxes, which
no other minister would have ventured to propose,
and certainly none other would have succeeded in
raising; hence also our second attack on France
by the coalition of 1799. But Mr. Pitt's perse-
verance was not blind persistency; on a renewed
experience of the weakness of our allies, on a
proof of the sufferings of the country from heavy
taxation and deficient harvests, he felt the expe-
diency of peace, retired from office to facilitate
its conclusion, and gave it, when not responsi-
ble for its conditions, a sanction unequivocal and
sincere. His ardour in 1803 for the re-commence-
ment of war, admits of a less satisfactory solution ;
it discovered much more the zeal of a combatant,
than the discretion of a senator ; a disposition to
sink the admonitory recollections of our late
struggle in ardour for a new contest. He warned
us once in Parliament of the magnitude of the
expense, and of the necessity of preparing our-
selves for sacrifices greater than before; but his
caution was general and cursory, unaccompanied
by any private admonition to the inexperienced
ministry of the day, or any advice to delay hos-
tilities, until an assurance of co-operation from the
great powers of the continent. His last great
measure, the attack on France by the coalition of
1805, was,, doubtless, on the whole, injudicious,
preponderant as France then was in military
strength, the whole under the guidance of a single
head. Mr, Pitt fell here into a miscalculation, by
no means uncommon with men of ability ; that of
anticipating a judicious course on the part of his
7() Conduct of Public Men.
coadjutors. Every impartial man, however, must
allow, that it would have been carrying mistrust to
an extreme, to anticipate the commission of faults
so gross as those which led to the disasters of Ulm
and Austerlitz. And those who are surprised
that a man of talent should misplace his confidence,
should calculate on others acting with the discri-
mination natural to himself, will be at no loss to
find similar examples in the conduct of the most
eminent men of the age : in that of Lord Welling,
ton, when he expected discretion from Blucher;
and in that of Buonaparte, when he allowed the
command in Spain to remain in the hands of
Jourdan, or when, at a subsequent date, he com-
mitted that of his main body at Waterloo to Ney.
Since the distress that has followed the peace of
1814, it has been publicly said, that the embarrass-
ment likely to ensue to our productive industry
on the cessation of the war expenditure of govern-
ment, had not escaped the foresight of Mr. Pitt.
Such assertions are often made loosely and in-
accurately; but the one in question seems to rest
on probable grounds. Mr. Pitt was no stranger
to the limited produce of our revenue in peace ; he
had felt the financial difficulties of the first years
of the contest, and the surprising relief afforded to
the Treasury by the imposition of war taxes.
He could thus hardly fail to be aware that the
spring given to our national industry was, in
a great measure, artificial; nor could he be un-
conscious of the ultimately injurious operation of
borrowing, when carried to an extreme. Nor is it
incompatible with such impressions, that he should
for a time have overlooked the inferences which
they seem so naturally to suggest, and have been
hurried along by ardour in the contest, by an
earnestness to obtain a present advantage at the
9
Cuuduct uf Public Mf/i. 77
hazard of a future burden. It is not when engaged
in the bustle of business, that the mind is capable
of reposing on itself, of meditating, patiently and
impartially, the result of favourite measures.
How few plans of remote operation, of a character
requiring continued thought in the combination
and length of time for the execution, originate
with men in office ! Add to this that the great
evils of our financial system, the depreciation of
our bank paper, the extreme pressure of taxation
took place not only after Mr. Pitt's death, but, in
some measure, in consequence of a deviation from
his principles. Never wduld he have given his
sanction to such measures as our orders in council ;
or if, for the sake of argument, we suppose him to
have been led, by urgency or by plausible argu-
ment, to their adoption, he never would have per-
sisted in so absurd a course during four years, until
it, in a manner, drove the Americans to the alter-
native of war — a war carried on between us and
our best customers — a war in which it was appa-
rent, that injury to our opponents must be almost
as pernicious to our national industry, as injury to
ourselves.
The responsibility of a great part of our exist-
ing burden, is thus transferred from Mr. Pitt to
his successors, of whose measures, in regard to
neutrals, from September, 1807, to May, 1812, it
would be difficult to give a satisfactory explanation.
They implied a total unconsciousness of the pre-
carious state of our paper currency, and, in regard
to trade, either a disavowal of principles generally
admitted, or a readiness to infringe those prin-
ciples for temporary purposes — purposes that could
have no decisive effect on the result of the grand
struggle with France. A different sera began in
1812: our Orders in council were withdrawn ; peace
78 Conduct of Public Men.
repeatedly offered to the United States ; and, at a
subsequent date, no harsh treaty of commerce
imposed on France in the day of her adversity.
Add to this, that since the peace, no attempt has
been made to give a fallacious prop, by bounties or
prohibitions, to any of our suffering interests.
Still our present ministers have not, on the whole,
been successful in rendering the national resources
instrumental to the national relief; their fault has
lain, not as is usual with governments, in interfering
with the course of productive industry, but either
in deficient foresight in regard to the changes that
are occurring in our financial circumstances, or in
deficient vigour in acting on such changes. Take
for example the rise in the value of money, a
natural consequence of a return to a pacific system,
and one which, with some temporary exceptions,
has been regularly gaining ground since 1814. Would
Mr. Pitt, had his life been prolonged, have de-
layed until the eighth year of peace a reduction of
public salaries, an adaptation of government pay-
ments to the augmented value of the money
in which the payments were made? Is it not more
likely that he would have long since anticipated
the result of the general change, and have given,
in his own case, a decided example of what h0
would have exacted from others? Farther, is,
it probable that in peace he would have adhered
blindly to the financial routine pursued during
war, without attempting some measure, founded on
the course of circumstances since 1814, — the evi-
dence of our increasing numbers,— the prospect
of tranquillity on the continent, — the conviction
annually gaining ground among ourselves, that a
state of war is as contrary to policy as to hu-
manity, and, from our growing power, far
Conduct <>/' I'ttM/c .1/r//. / -
necessary for defence than when France was
so preponderant? <
If ministers are open to the charge of deficient;
vigour in finance, in what manner shall we charac-
terize the conduct of their parliamentary oppo-
nents? On their part there existed no motive for
reserve, in regard to public distress; no dread of
disseminating alarm, by the proposition of change ;
yet the investigations of most of the Opposition
members have been confined to insulated points,
their objections to specific grants. Where, in the
long list of those who opposed the war, did we
find a speaker capable of giving the house or the
country a distinct conception of the effects of
our expenditure on the national prosperity?
Where, on the part of those who have combated
the measures of ministers since the peace, do we
find a comprehensive view of our financial situation,
the suggestion of any measure of a new or of a
general character, adapted to our present circum*
stances? To what shall we ascribe this deficiency
of resource, this scanty measure of statistical
knowledge on both sides of the house? To a
cause to which we have owed no small share of
our political disappointments in the present age —
an education on the part of our representatives
very little suited to their functions as men of
business. Of the years given at our universities
to the ancient languages, a part were better be-
stowed on modern history and political economy;
or, if classic ground is too sacred to be touched ;
if the time thus applied admit of no diminution, it
is perfectly clear that the labours of our public
men, when in Parliament, should be modelled on a
new plan. To give a cursory attention to a mul-
tiplicity of topics, leads to a knowledge very little
beyond that of first impressions: to obtain a satis-
80 Conduct of Public Men.
factory conviction, to place our opinions on a firm
basis, it is indispensable to make a selection, to
restrict the objects of enquiry, and to give a long
continuance to our research and reflexion on the
prescribed themes. It is the want of this caution
in literary labour, and, in some measure, in pro-
fessional pursuits, that so often causes the waste of
promising parts on the southern shore of the
Channel : it is an observance of it that in Germany
gives distinction to so many men apparently less
brilliant. Looking round among ourselves, and
extending our view to men of eminence generally,
commercial as well as professional, what else than
this limitation of object and perseverance in pur-
suit, do we find to form the basis of such characters,
and to distinguish them from the credulous multi-
tude, from those who listen with ready acquiescence
to every plausible assertion? If the habits of our
representatives are different, if they unfortunately
betray the absence of such discrimination and
perseverance, ought it to be matter of surprise,
that delusion should have prevailed among
them during so many years : that a temporary
rise of prices and increase of activity, should
have been mistaken for a permanent augmentation
of national wealth ; and that the unwelcome dis-
coveries of late years, the Jinale of which is no
less than a suspension of their incomes, should
have come on them by surprize?
CHAP. IV.
Our Currency and Exchanges since 1792.
HAVING now traced the fluctuations in the price
of commodities, and in our productive industry
during the last thirty years, we proceed to a topic
closely connected with the former — the variations
in our continental exchanges and value of our
currency. In this, one of our chief objects will
be to trace the operation of our subsidies, and of
our purchases of corn on the occurrence of de-
ficient harvests, these being the causes which
mainly affect our foreign exchanges, and are pro-
ductive of great and rapid fluctuation. They are
in general demands both of large amount, and of
sudden occurrence, superadded to our customary
disburse, and requiring to be paid before time can
be given to our merchants and manufacturers to
prepare and send abroad an equivalent amount
in commodities. This chapter will accordingly
comprise,
A historical sketch of our continental ex-
changes;
The effects of the exemption of the Bank from
cash payments ;
The questions of depreciation and over-issue; —
and, lastly,
The amount of financial aid derived by us from
the Bank Restriction Act.
82 Historical Sketch of our Exchanges.
Historical Sketch of our Exchanges.
From 1792 to 1 797.— In the first year of the
war our participation in the contest produced
little effect on the exchange, in consequence of
our aid being furnished less in money than in
troops and military stores. Next summer (1794)
a sudden depression was produced by the re-
mittances commenced for the Prussian subsidy;
but it ceased as soon as it became known that that
power, a far less zealous ally in those days than
subsequently, was not likely to fulfil its engagements.
In 1795, circumstances became very different:
OUT troops had been withdrawn, our contribution
to the allied cause was made, in a great measure,
in money, and an unfortunate deficiency in our
harvest forced us to make large importations of
corn. A balance from commercial payments
began thus to be added to the remittances of
government, and the result was a considerable fall
in the exchange, bank notes, the currency of
England, becoming inferior in value by five per
cent, to the metallic currency of the continent.
This difference was of serious moment to the
bank, and obliged them to limit greatly the dis-
count of mercantile bills, under an apprehension
that the notes issued for such discount would be
presented again for specie, and the latter exported
to the continent. Of the distress caused to mer-
chants by this limitation, those only can judge who
witnessed the pecuniary difficulties of 1795 and
1796, or who have had access to read in the par-
liamentary papers the anxious correspondence of
that date between Mr. Pitt and the bank directors.
At one time (November, 1795) the price of gold
Historical Sketch o'inir Kn-Jur/teA. 83
purchased in bank notes, had risen to eight per
cent, above its coinage value, and necessitated a
farther and most distressing reduction of bank
paper. In the autumn of 17^>» a better harvest
delivered us from one cause of impoverishment;
but towards -the end of that year, and the be-
ginning of 1797> distrust and alarm were renewed
by a threatened invasion from France* The
failure of several country banks having unluckily
occurred at that critical moment, the consequence
was a run on the other country banks, and a great
drain of gold from the bank of England* In
vain did the directors resort to their hitherto un-
failing expedient, a reduction of the quantity of
their notes: the evil was new and peculiar; the
drain continued without a prospect of abatement,
when, after bringing down their circulation to
nearly S,600,000/. and communicating their
situation to ministers, the directors received, on
the 25th February, 1797* the well-known in-
junction from the privy council, to suspend all
farther payments in cash.
This order, limited at first to a few weeks, was
soon after prolonged to the end of the current
session of Parliament, and eventually to the
opening of the succeeding session. In the interval
circumstances became more favourable, corn was
abundant, our continental subsidies drew to a
close, our exports of merchandise were large, the
exchange rose, and specie flowed into the country
from causes very similar to those which had lately
made it flow out. The bank was now in a state
to resume cash payments; but Parliament finding
that no inconvenience had resulted from the sus-
pension, determined to adhere to it, and passed
resolutions which made exemption from cash pav-
84 Historical Sketch of our Exchanges.
merits be considered our settled policy during the
remainder of the war.
From 1797 to 1802.— The year 1798 was more
than usually prosperous, being marked by a
favourable season at home, an exemption from the
burden of subsidies abroad, and by distinguished
success in our naval operations. Confidence being
now restored, money became more rapid of cir-
culation and comparatively plentiful. The suc-
ceeding year, however, presented a very different
spectacle: Austria, encouraged by a British sub-
sidy and the co-operation of Russia, took the field
against France, and hardly did intelligence arrive
of the formation of this second coalition, and of
an engagement for a double subsidy, when our con-
tinental exchanges began to bear the mark of rapid
'declension. The summer of 1799 was wet, and,
as in 1796, it unfortunately happened that large
purchases of corn were necessary at the time of
the greatest pressure of foreign expenditure. Such
continued our situation until the summer and
autumn of 1800, when the successes of Bonaparte
in Italy, and of Moreau in Germany, brought our
subsidies to a close ; but the calamity of a deficient
harvest had again taken place in 1800, and raised
the price of corn during that and the following
year to an unexampled height. The total value of
our corn imports during 1800, 1801, and part of
1802, was declared in evidence before a Parliament-
ary committee to be no less than 15,000, 0001. sterling.
Of all the trials our money system had yet
experienced, this was the most severe; and it was
accordingly in 1800, that the effects of a non-
convertible paper became distinctly visible in the
state of our exchanges. The wants of the mer-
Historical Sketch of* our Exchanges. 85
chants drove them to the bank for discounts, and
their demands were supplied with a confidence
which the directors durst not have exercised had
they heen liable to pay in specie. This accom-
modation, far from beneficial in its remote con-
sequences, served at the time to lessen to the
public the evils arising from the subversion of the
exchange, and the subsequent depreciation of our
paper (between three and five per cent.) was
hardly perceived, either by us or by foreigners.
The charge most open to observation was in the
materials of our currency: our guineas had now,
for the most part, gone abroad, and our small note
circulation, insignificant during 1797> 1798, and
part of 1799, became augmented in 1800, 1801,
and 1802, to four millions, exclusive of the small
notes of our provincial banks.
From 1803 to 1808. — The peace of Amiens was
too short to admit of a repeal of the Restriction
Act, and on the renewal of war, all idea of repeal
was relinquished, a continuance of the suspension
being considered an essential part of our policy.
Unattended by continental subsidies, or by the
necessity of corn imports, the years 1803, 1804,
and part of 1805, passed over without any pecu-
niary pressure; and when, in the latter part of
1805, the formation of a new coalition produced a
sudden revolution in the exchange, the day of
Austerlitz, so disastrous in other respects, dispelled
the cloud that was gathering over our financial hori-
zon, and showed in the distance the suspension of
our continental remittances. War ensued between
Prussia and France, but that contest took place at
a time (1806) when we had a ministry sparing in
their advances to our continental allies : the
G 3
8(i Historical Sketch of our Exchanges.
exchange was not seriously affected, and after the
peace of Tilsit (July 1807) began visibly to recover.
Four years of the war had thus passed without
any material inconvenience from the non-con-
vertibility of our bank paper, and its depreciation,
still unknown to the public, had been injurious
only at intervals. But we are now arrived at a
different aera ; a period when our hatred of Bona-
parte, the confidence inspired by our decisive
superiority at sea, and the influence of enthusiastic
counsellors at home, made us forget calmer con-
siderations, and join in a general call for a system
of vigour. The sufferings of several great branches
of our commerce; the stagnation of our East
India trade; the progressive sinking of West
India property; the diminished profit of ship
owning; — misfortunes arising chiefly from heavy
taxes and increased expence, were ascribed by
many of the distressed parties to the competition
of the Americans. Commercial jealousies have
never been inactive: the Transatlantic navigators
became in our eyes, what the Dutch had been in
those of our ancestors under Cromwell and
Charles II.; and our merchants had no great
difficulty in persuading a ministry little versed in
the sources of national wealth, that when neutral
navigation should be controlled, the continent
must draw its supplies from England. Hence our
Orders in council of November, 1807, orders
issued with so much ardour, with such confidence
of a favourable result, that our government paid
no attention to the singular fact, that the intercourse
we were so anxious to control, was, in the opinion
of our enemies, highly advantageous to us; for
Bonaparte had, almost at the same moment, inti-
mated to the American ambassador at Paris, his
Historical Sketch of our Exchanges. 87
intention to prohibit it, declaring that "all maritime
commerce tolerated on the continent, whether
through Americans or others, must turn to the
advantage of England." These remarkable mea-
sures, joined to an embargo adopted by the
American government, produced an. almost com-
plete suspension of intercourse between the United
States and Europe, during 1808; the first time that
such had been the case during twenty-five years.
The stoppage of the American navigation is,
we believe, the greatest error on record in mercan-
tile history. Our trade with that country which,
on the acknowledgment of its independence in
1783, we considered as wrested from our grasp,
had proceeded in a ratio of continued increase,
affording both advantage to the parties engaged,
and the most gratifying lessons to those who,
studying in the closet the origin of national pros-
perity, are enabled to discover how often the real
are at variance with the apparent causes. This
increase showed not only the inefficacy of political
antipathies in impeding commerce, and the possi-
bility of reaping benefit from our former colonies,
without the charge of defending them; but the
still more important truth, that the greater the
freedom of the trade of the Americans, the more
active their intercourse with France, Holland, and
other countries, the greater the advantage arising
to us. In what manner, it may be asked, was this
result produced ; a result so contrary to the tenets of
the mercantile theory, of the colonial system not
of this country only, but of all Europe? From
causes of which the explanation, at first somewhat
complicated, becomes when examined, sufficiently
easy and convincing — the increase of American
capital consequent on unfettered trade, and the
88 Historical Sketch of our Exchanges.
direction of a larger share of it to the purchase of
our manufactures. Our exports to the United
States amounted in 1805, 1806, and 1807, to the
very large sum of 11 or 12,000,000/. sterling,
while our imports from that country (Seybert's
Statistical Annals, pp. 137, 15,5) did not exceed
7 or 8,000,000/.: the remainder (Baring on the
Orders in council, p. 155) was remitted to us in
money, or, what is the same thing, in bills of ex-
change from the continent of Europe, being the
proceeds of tobacco, cotton, rice, and other
American products sold there. The continent,
feeble at that time in its stock of manufacture and
means of giving credit, could not supply the
Americans with merchandize equal to more than
half the articles which it imported from them;
and the result was the transmission of the proceeds
to this country, a course which supplied us with
funds for our continental expenditure as regularly
as the packets crossed the narrow seas. Such was
the trade stopped by our Orders in council; a
measure which, persisted in with blind pertinacity
from year to year, drove the Americans first to the
temporary expedient of an embargo, and after-
wards to the establishment of manufactures in
their own country.
From 1808 to 1814. — This stoppage, sufficient
of itself to produce a rapid fall in the exchange,
was unluckily coincident in point of time with a
heavy drain of money to Portugal and Spain, in
support of the contest with France. From the
Appendix to the Report of the Bullion Committee
(p. 232) it appears that nearly three millions ster-
ling were sent in specie to the Peninsula in 1808.
Next year neutral intercourse was, in a great
Historical Sketch of our Exchanges. 89
measure, resumed, and the hazard of pecuniary
embarrassment would have been less serious, had
we not unfortunately been visited by the other
great cause of pressure on our foreign exchanges,
a deficient harvest. It became indispensable,
therefore, to import corn at an unfortunate mo-
ment; at a time when, from other causes, our
bank notes were at a depreciation of twelve or
fifteen per cent. And the sum paid to foreigners
for corn in 1810 being very large, exceeding (see
the return to Parliament in the following year)
seven millions sterling, our exchanges fell so as to
bring our bank paper more than twenty per cent,
below bullion. This fall took place some time
after the public attention had been drawn to the
subject by the Report of the Bullion Committee;
and, great as it was, it would have been still
greater, had not the abundant harvest of 1810
come most opportunely to our relief.
The autumn of 1810 was the first season in which
the decrees of Bonaparte against our intercourse
with the continent were actually carried into
effect. He had then brought his war with Austria
to a close, secured himself by an alliance with
that power, and conceived, from the fall of our
bank paper and the multitude of our mercantile
failures, the hope that a vigorous enforcement of
his decrees would complete the measure of our
embarrassment. Hence, in the winter of 1810,
the general seizure of British shipping in the
Prussian harbours ; hence also the ridiculous mea-
sure of burning lots of our merchandize in his sea-
ports.
In 1811 our corn imports were inconsider-
able; but the operations of neutral commerce
were much cramped, our remittances to the penin-
90 Historical Sketch of our Exchanges.
sula were large, and our exchanges extremely low.
The same causes operated with increased effect in
1812, the year that our differences with the
United States unfortunately terminated in war.
Happily, towards the end of that year, the result
of the Russian campaign opened a cheering pros-
pect in the political horizon ; but this prospect
was remote ; a great struggle was still necessary,
and the campaign of 1813 required exertions in
Spain, and aid to our allies in Germany, on a scale
of unparalleled magnitude. By this time our me-
tallic currency was exhausted, and the specie
bought up for the cause of the continent, was
paid for by government in bank notes, at the
enormous premium of twenty-five or thirty per
cent. Such continued to be the difference between
paper and coin, until the overthrow of Bonaparte
in April, 1814, after which the difference diminished
to ten, and even to eight per cent. His return
from Elba in 1815, and the vast preparations forth-
with made on the continent by us and our allies,
again lowered the exchange to twenty, and even
twenty -five per cent., a fall which, after his second
overthrow, disappeared with a rapidity that seemed
destined to exemplify the arguments of the anti-
b ullionists ; of those who maintained that the de-
preciation of our notes arose not from over-issue,
but from continental demands.
Historical Sketch of our Exchanges. <)1
Tabular sketch of the principal demands on our
currency for continental subsidies and purchases
of corn since 1792.
Years.
1792.
1793.
1794.
Events Political and
Commercial.
Peace.
Great mercantile fail-
ures: limitation of our
paper currency.
Confidence reinstated.
1795. Subsidy to Austria.
1796. Subsidy continued, & an
importation of corn.
1 797- Reduction of our paper
currency; great scar-
city of money.
1 798. Neither subsidy nor corn
import.
1799. Renewed subsidies fol-
lowed by a deficient
harvest.
1800. Continuation of subsidy
to Austria; great im-
portation of corn.
1801. Subsidy suspended, but
corn import continued.
1802. Peace.
From 1802 No large importation of
to 1808. corn, except in the
summer of 1805; nor
any subsidy of mag-
nitude, except in the
autumn of that year.
From 1808 War in Portugal and
to 181 4-. Spain throughout the
whole period ; war in
Germany in 1809;
in Russia in 1812, and
State of our Exchange
with the Continent.
A little above par.
A considerable rise in the
Exchange.
Exchange nearly as in
1792.
A fall at first small, after-
wards considerable.
Exchange continues very
low.
A considerable rise in the
exchange ; large im-
ports of specie.
Exchange continues in
our favour.
Fall of the exchange
after Midsummer.
Continued depression.
Continued depression.
Exchange reinstated.
The exchange little af-
fected during these six
years, except in the
autumn and winter of
1805.
The fall in the exchange
great and permanent,
beginning at eight or
ten per cent, increasing
to twelve, fifteen, twen-
Tabular Statement of our
Years.
1814,
1815.
Events Political and
Commercial.
in Germany & France
in 1813 and 1814.
Corn purchases to a
great amount in 1810.
The Americans ex-
cluded from inter-
course with the con-
tinent after 1808, but
more particularly af-
ter 1810.
Peace after 1st April,
and a great increase in
the export of our mer-
chandize, but a con-
tinuation of remit-
tances for subsidies
and corn imports.
In April, May, June,
renewal of war.
In August and Septem-
ber peace; cessation
of corn imports; re-
newal of American
intercourse.
1816. No subsidy or import of
corn.
1817&1818. Large imports of corn.
1819, 20, 21, No import of corn or
& 1822. heavy continental
charge.
State of our Exchange
toith the Continent.
ty-five, and eventually
to nearly thirty per
cent.
A considerable reinstate-
ment of the exchange,
leaving it from eight
to ten per cent, against
England.
Fall of the exchange
twenty and twenty-five
per cent.
The exchange recovered
andbrought first within
twelve per cent., after-
wards within five per
cent, of par.
Exchange nearly at par.
Exchange again lowered
three, four, five, and
eventually six per cent.
Exchange rises first to
to par, and continues
somewhat above par.
Distribution into Periods.
The years in the preceding table may be classed
into periods, each marked by distinct features.
The first, from 1793 to 1 797, preceded the ex-
emption act: after that act came an interval of
two years, during which, from a concurrence of
Corn Imports and Subsidies. Q3
favourable circumstances, no injurious effect took
place in regard to the exchange. A very different
scene was opened by the transactions of the three
years between the summer of 1799 and that of
1802; years of heavy continental demand and of
great pressure on the exchange. It was, however,
reinstated by the peace; nor did it experience any
pressure of magnitude or long continuance in
consequence of the comparative lightness of such
demands, during the long interval that elapsed
from the autumn of 1802 to that of 1808. This
period of six years is perhaps the most remarkable
of the whole, exhibiting the possibility of carrying
on a war of great expence, without a material de-
rangement of our currency, so long as we left to
trade its free course, and abstained from great con-
tinental advances. It was, doubtless, this long
enjoyment of financial ease, this apparent stability
of our money system, that inspired our ministers
and bank directors with over confidence, leading
the former to their unfortunate measures against
the American trade, and impressing the latter
(Evidence, Bullion Report, pp. 89, 96, 144) with
the notion that their issues of paper had no effect
on the exchange. Hence, in a great measure, the
depreciation that prevailed during the five years
from 1809 to 1814.
Such were the principal events that operated
on the exchange during the war: we shall next
endeavour to exhibit their effects in a collective
form.— What, it may be asked, was the amount of
our corn imports during the war? In computing
these, it is fit to bear in mind that we had become
previously to 1793, a corn importing country, and
that a certain quantity might be termed our
habitual import ; an import not affecting the ex-
94 Tabular Statement of our
change, but paid by a corresponding export of our
produce or manufactures ; our coals, our tin, our
hardware, our cottons. We dwell, therefore, only
on the years of scarcity and extra import, which,
during the war, were 1796, 1800, 1801, 1802,
1805, 1810. After deducting from our total
supply in these years our average annual import,
there remains, as extra import, a quantity of which
the cost, in the six years collectively, was not short
of 25,000,000/.
Next as to the amount of our subsidies:
the total during twenty-one years, from 179S
to 1814, was between 50 and 60,000,000/.,
forming with the corn purchases, an aggregate of
S0,000,000/. Of this great sum, what proportion
was sent abroad in the shape of specie ? Of the
subsidies, the chief part was supplied in clothing,
arms, stores; of our corn purchases, the larger
share was necessarily paid in money. If, without
attempting nicety of calculation, we assume the
export of specie for these purposes during the
whole war at 30,000,000/., we shall be at no loss
to account for the disappearance of our metallic
currency, and of such supplies of bullion as found
their way to this country.
Since the peace, the different periods, though
less marked by extremes, have been equally de-
serving of attention, as illustrative of our view of
the causes of fluctuation. In the autumn of 1814
our war charges ceased, our exports had free ac-
cess to the continent, and the exchange altered
from twenty-five to ten, and even eight per cent,
only, against us : it would have risen farther, had
not our corn imports been large. But no sooner
did the return of Bonaparte from Elba revive
the alarm of war and subsides, than the exchange
Corn J/tiiorts and
fell to eighteen, twenty, and twenty-five per cent.;
a depression from which it recovered as suddenly
after the battle of Waterloo, and the prospect of a
speedy peace. During 1810 there was neither
corn import nor subsidy ; the American trade with
the continent was open, and the exchange arrived
at par, at which it for some time remained; but
the deficient harvest of that year necessitated in
1817 corn imports on a very large scale, reduced
the exchange, and would have completely overset
it, had not all the counteracting causes of free
trade been in operation. By their aid, we were
enabled, during 1817, 1818, and the early part of
1819, to pay for an unexampled amount of foreign
corn, (above 20,000,000/. as appears by the Ap-
pendix to the Agricultural Report of 1821, p. 396)
without a greater depreciation than four, five, or
six per cent. Since 1819, these drains having
ceased, the exchange has been steadily in our
favour.
Contradictory Opinions on the Bullion Question.
We have now brought to a close our historical
sketch, and shall proceed to make some remarks
on the very opposite doctrines held in regard to
our paper currency, by the adherents of Ministry
and Opposition; or, to speak more correctly, by
the adversaries and supporters of, the Bullion
Committee of 1810. The former are still un-
willing to admit the existence of depreciation in
our bank paper, even in the latter years of the
war: the latter, equally unreasonable, refuse to
trace such depreciation to the extra demands made
on us for subsidies and corn purchases, and insist
that it originated in over issue on the part of our
96 Our Money System previous to 1797^
banks ; a singular discrepancy this, in a country
of free discussion, after the direction of so much
reasoning to the subject, and the lapse of a
so many years replete with commercial and political
information. This discrepancy implies, we appre-
hend, more than the absence of impartiality: it
gives cause to suspect in one party an inadequate
knowledge of the principles of productive industry;
in the other an insufficient attention to the evidence
of facts. In attempting to point out the manner in
which both have deviated from impartial inquiry,
and exceeded the limits of fair inference, we shall
proceed as much as possible by a reference to
documents, describing first the nature of our cur-
rency previous to the war, and the effect produced
on it by sudden drains for continental disburse :
while our next and more intricate task will be to
define the results of the exemption act, the operation
of which has, from very different views, been con-
siderably over-rated by each party. The bullionists
attribute to it the whole, or nearly the whole, of
the enhancement of commodities during the war;
while their opponents, regarding it as no less
potent in good, than their antagonists in evil,
are accustomed to speak of it as the grand engine
of our financial support; both sides forgetting that
it was nearly coincident in point of time with a
change in our financial system, of much larger
operation ; we mean the increase of our war-taxes
and the reduction of our loans.
Our money system previous to 1797- — The nature
of our money system will be best understood by a
comparison with that of neighbouring countries.
The amount of money circulating in France, has,
since the days of Necker, been computed, or
Our Money System previous to 179% 97
rather guessed at 80,000,0007. sterling; the amount
in England and Scotland, not ascertained with
more certainty than that of France, is supposed
(Bank Committee Report, May, 1819,) to be
between 50 and 60,000,000/. The currency of
France is almost entirely metallic: there are in
that country no banks of circulation, except the
bank of Paris, and none of its notes being below
SO/., paper forms a very small part of the circulat-
ing medium. A foreigner may reside many years in
a provincial town in France without seeing a bank
note, and may occasionally hear the natives speak
of having seen them as of a circumstance somewhat
unusual and remarkable. France is consequently
prevented from saving interest on 40 or 50,000,0007.
of metallic currency, the place of which, were the
banking system general, might be supplied by
paper. The case of France is, in a great measure,
that of the continent at large, while in this country
on the other hand, the saving arising from bank
paper has been enjoyed, in a greater or less degree,
for more than a century.
In what manner was this saving accomplished
before the exemption from cash payments in 1797?
A bank of good character issued notes to an ex-
tent of four or five times the amount of the gold
kept in its coffers, a circulation of 100,0007. being
maintained in ordinary times without a greater re-
serve or dead fund than between 20 and 30,0007.,
leaving above 70,0007. to be vested in productive
securities, such as short-dated acceptances, ex-
chequer bills, or the public funds, all possessing a
characteristic indispensable to a banker, that of
speedy convertibility into cash. Hence an income
to the banking-house of C2 or 3,0007. a-year arising
from perfectly fair sources ; its credit and the su-
H
98 Our Money System previous to 1797.
perior convenience of paper to metallic currency.
This saving, considered in a general sense, was such
as to form a national object, England having, even
previous to the exemption act, economised the
interest on a sum probably exceeding 20,000,000/.
of its currency.
Such was the state of our money system in the
early years of the revolutionary war, when the con-
fident character of our ministers and the surpris-
ing exertions of France led to an unexampled
extension of our continental expenditure. It be-
came particularly heavy in 1795, and unfortunately
a deficient harvest in that year necessitated in 1796
large purchases of foreign corn, augmenting greatly
the demand on the bank for metallic currency :
hence a reduction of its discounts to merchants, a re-
luctance or rather inability to make the advances re-
quired by government, and a general embarrassment
in the money-market. Under such circumstances,
nothing could be more natural to all parties than
to look for relief in exempting the bank from the
necessity of paying cash for its notes; a measure
that would enable it to continue its customary ac-
commodation to trade, while government should
meet the wants of our allies with our spare coin
and bullion. The experiment, however, was too
bold and novel to be attempted until the continued
call for guineas in February 1797 left no other
alternative. It excited both surprise and alarm,
but was divested of a part of its hazards by the
known solvency of the bank, the acknowledged
discretion of those to whom the new privilege was
to be entrusted, and by the fact that the personal
interest of a director of the bank of England is
connected in a very insignificant degree with an
increase of the income of that establishment.
Bank Jteslriction Act. 90
Effects of the Restriction Act. — This decisive mea-
sure, which ought rather to be called an exemption
than a restriction act, was limited at first to a few
months, and the exchange being favourable during
1797, the bank made ample provision bytheautuma
of that year for the resumption of cash payments.
But that step being deemed unnecessary by govern-
ment, the exemption assumed the character of a
permanent war measure, and enabled the bank to
give a greater latitude to its accommodation both
to merchants and the treasury. What were the
principal characteristics of our money system in
the succeeding years ? A relief from such difficul-
ties as those of 1796 ; an increase, at first small,
afterwards considerable, and eventually very large,
of the amount of bank notes in circulation. Then
as to the value compared to coin or bullion, there
was, after 1799, a fall (about 4 per cent. ) in the value
of our notes, which after long remaining stationary,
was followed, after 1809, by a much greater fall.
Lastly, the rise in the price of articles, though it
preceded the exemption act, and originated con-
sequently in other causes, continued during the
whole period of the non-convertibility of our bank
notes, and was particularly remarkable after their
greatest depreciation. These facts are admitted by
ail parties ; the difficulty is in tracing them to
their origin, and in discriminating how far the ex-
emption act was or was not instrumental in pro-
ducing them.
The circulation of money between wholesale
dealers is in general rapid, and the writers of the
Bullion report, aware that the amount of bank
notes in circulation had been materially increased
as well as that the scale of discounts (Report,
p. 26.) had been greatly enlarged, naturally became
H 2
100 The Bank Restriction Ad.
impressed with the idea of over-issue, and sought
in it almost exclusively the origin of the great rise
that has taken place in our prices during the war.
But this opinion is liable to serious objections :
first, the amount of Bank of England notes in
circulation affords, as we have more fully shown
in the Appendix, no satisfactory criterion for
estimating the increase or decrease of our whole
circulating medium. In the next place the means
possessed by the Bullion Committee of appreciating
the effect of the various other causes of enhance-
ment were very limited : at that time (1810) we
had not felt the transition to peace, nor been
enabled to draw a satisfactory comparison between
the state of our productive industry in peace and
war. Few if any of those who wrote and spoke
most confidently on the subject, possessed an ac-
curate knowledge of the increase of our productive
industry consequent on the war, or even of the
increase of our population. Had they been aware
of these vital truths, had they known how materially
prices were affected by causes altogether distinct
from our paper currency, such as the demand for
men for the public service, and the insufficiency
of our growth of corn to our consumption, the
conclusions of the Report would have been
materially different. The various facts and argu-
ments adduced in our preceding chapters, show
how large an addition to our currency was indis-
pensable to transact our extended business, and to
correspond with our augmented prices ; and when
to this is added a reason, different in its nature,
but equal in its operation — the inducement after
1799 to export our metallic currency to the Conti-
nent, we shall find ample means of accounting for
the increase of our bank paper.
The Bank Restriction Act. 101
What then were the results distinctly attributable
to the exemption act; and, in the first place, what
was its effect on the rules followed by the bank of
England in regard to discounts ? Its effect was
highly beneficial to that corporation : the directors
were relieved by it from the necessity of watching
continental exchanges, from the apprehension of
a drain of metallic currency on the approach of a
subsidy, or a large import of corn ; the rules of dis-
count became greatly simplified, and, after some
years, the directors considered themselves at
liberty to issue notes to whoever tendered bills
possessing the requisites of solidity and shortness
of term, along with the less easily ascertained
characteristic of being for a bondjide transaction.
In regard to country banks, the provision made
by the act, if not properly an exemption, was an
accommodation of great importance. These banks
were relieved from the necessity of paying cash if
they tendered bank of England notes, a supply of
which was attainable without the uncertainty and
loss so frequently attendant on the acquisition of
coin. A stock of notes could be procured at very
short notice in exchange for the mercantile ac-
ceptances or other securities in which the funds of
country banks are generally vested; and the latter,
thus relieved from much expense and anxiety, were
enabled to lessen greatly their reserve fund, and
consequently to extend their discounts.
Such were the results of the act in regard to
banks : we proceed to those which affected the
public.
If, for the sake of calculation, we assume that
in 1796 the total bank paper in circulation in the
kingdom was 25,000,000/., and that 7,000, 0001. of
coin were kept in depot, we may safely infer that
H3
The Bank Restriction Act.
of those 7,000,0(307. two-thirds became, in the
course of a few years, disposable for the purpose
of discount. Now, if from the rapidity of our
transfer, a million of money Suffice to circulate
twenty or thirty times as much of merchandize, the
change, arising from the additidn of four or five
millions to our currency, could not be otherwise
thah great in its degree, and extensive in its oper-
ation* Continental demands arose in 1799, and
were carried during three years to an unexampled
height: these the exemption act enabled tis to
rneet, not without a depreciation of our clirfe'nc'y,
but without pecuniary straits. It counteracted
also, ill concurrence with the war taxes, the
tendency of our enormous expenditure td raise the
rate of interest. What, it may be asked, was the
ciirrerit or average rate of interest previous to
1793? If we form bur computation, not on the
price of stocks, which from artificial causes fluctu-
ated greatly, but on the general transactions of
merchants, bankers, and capitalists, we shall find it
to have been between four and five per cent.; and
if we apply a similar mode of calculation to the
\var, \ve shall have reason to fix the average rate
of interest between five arid six per cent., the
charge of commission and other small additions
familiar to persons in business (Evidence to the
Bullion Report, p, 124.) accounting for the excess
above the statutory limit. The effect of a war, the
most expensive ever waged, was therefore to raise
interest only one per cent.; an effect evidently
disproportioned to the unexampled calls made on
our national capital, and the cause of which is,
doubtless, in a great measure to be sought in the
reduction 'of the charge of banking consequent
On tire exemption act.
Questions of Depreciation. 103
The Questions of Depreciation and Over-issue. —
We now come to the most intricate question in
the history of our currency — the existence or
non-existence of over-issue, — a question main-
tained in the affirmative as confidently by one por-
tion of the public, as it is denied by the other.
On the part of the advocates of the bank, the great
argument is, thai the public possessed, after 1797*
the same power of limitation as before, both in
withholding bills for discount, and in paying over
their notes to the Treasury, an absorbent to the
extent of 1 or 2 000,OOU/. a week. Their antago-
nists, without denying this, which in fact cannot
be controverted, appeal to the state of the bullion
market ; to the acknowledged inferiority of bank
notes; and to the formidable argument, that a
contraction of the amount in circulation would, at
any time, have raised their value, and, if carried suf-
ficiently far, have brought them on a par with coin.
Such was the substance of the reasoning ad-
duced in the various speeches and publications
on this subject in 1810 and 1811 : such are still,
in a great measure, the tenets of the adverse par-
ties ; each interpreting, in conformity with their
own theory, the fluctuations that have occurred
since the peace. No speaker in parliament, no
writer on trade or finance has, as far we are aware,
attempted to reconcile arguments at present so
strongly in contradiction, or sought a solution of
the problem, while he admitted the substance of
the allegations on either side. In attempting this,
we shall begin, not with the question of over-issue,
but with that of depreciation, both as less compli-
cated in itself, and as explanatory of the degree to
which over-issue, if such be the proper term,
eventually took place.
H 4
104 The Questions of Depreciation
We set out by explaining the manner in which
depreciation was incurred abroad. If we take, as
an example, a campaign in the peninsular war, and
suppose that in a year, such as 1811 or 1812, in
which our expenditure there exceeded 10,000,000/.
there was supplied to the extent of nine-tenths in
clothing, arms, stores, and specie, exported from
England, leaving 1,000,000/. to be defrayed by
bills on our public offices ; in what manner, we
ask, could the receivers of these bills in the Penin-
sula turn them to account? There was not there,
as in this country, an excise-office, a custom-house,
a receiver for the county, nor, after the stoppage
of the American trade, were there merchants, to
whom they could be transferred at par or at a
slight discount. If remitted to England, these
bills could not purchase bullion ; and if they pro-
cured English merchandize without a perceptible
loss, the quantity of such was beyond the demand
of the peninsular or any continental market,
limited as it was in these years by Buonaparte's
anti-commercial decrees. The unavoidable con-
sequence was a fall in the value of our bills, in
other words, of the bank notes in which these bills
were paid, exemplifying the doctrine of Dr. Smith,
or rather the self-evident truth, that whatever
causes delay the payment, or restrict the circula-
tion of a currency, necessarily produce depreci-
ation, the ratio of which must increase with the
pressure of these causes.
This course of reasoning will receive confirm-
ation from a reference to our preceding historical
sketch, as well as from distinguishing the degree of
depreciation in different years. We find the latter
great or small according as the non-convertibility
of our paper was put to the test by continental
and Over-issue. 105
demands ; small in years such as 1803 and 1804,
when the war was merely maritime ; more consi-
derable in the case of continental operations, as in
1805 and 1806 ; serious, when to these operations
was joined, as in 1800, the necessity of corn pur-
chases ; and greatest of all when, as in the years
following 1809, there existed the double drain of
subsidy and corn import, without either a metallic
currency, or a free neutral traffic to interpose
their countervailing effects.
We are next to trace the effect of depreciation
abroad on the value of our currency at home.
The rise of price, after 1808, was most apparent in
the commodities for the supply of which we de-
pended on the Continent. Of these corn formed
an example on a great scale, and, on a smaller,
wool, timber, hemp, tallow, to which may be added
a few articles insignificant in amount but illustra-
tive of our proposition, because they were wholly
supplied by the Continent, such as cork, antimo-
ny, and others, the price of which rose rapidly
after 1808. In our hardware, cottons, and wool-
lens, branches in which the great constituent parts
of price are domestic, the rise was far less apparent ;
but that they were affected, and would, had the
war continued, have been affected much more,
there can be no doubt ; whatever enhances bread
being of so serious and extensive an operation, as
to be felt in every part of our productive industry.
The next point to be ascertained is the quantum
of the addition to our prices, caused by the non-
convertibility of our currency ; in other words,
the degree of depreciation produced at home.
And here it would evidently be unfair to draw our
inferences from a short interval, such as the latter
months of 1805, when our exchanges were de-
108 The Questions of Depredation
pressed by a sudden continental demand : the cor-
rect and impartial mode is to class the years of the
exemption by periods, beginning with the twelve
years that elapsed from the early part of 1?97 to
that of 18U9, a time, during which the inferiority
of our bank notes to coin, amounting sometimes
(see Mr. Mtishet's tables) to eight or nine per
cent., but generally limited to two or three per
cent., may be reckoned at an average between
three and five per cent. But as this inferiority
refers to continental purposes, and as a consider-
able interval elapsed before the depreciation be-
came so great in regard to payments at home, it
seems enough that we assume three per cent, as
the average rise in our prices, consequent on the
exemption act, until 1809. After that year, our
financial horizon became obscured, and the tone
of the calculator must be altered. If after 1809
twenty-five per cent, was the average depreciation
of our bank notes abroad, and if at home we make
the same allowance as before, an allowance
founded on the time which it takes to adjust
prices generally to an alteration in the value of a
currency, particularly where that alteration is not
apparent, we shall probably fmdi fifteen per cent, a
fair representation of the rise of prices, as far as
caused by the non-convertibility of our paper,
during the five last years of the war; in other
words, that 115/. of our bank paper was required
to make those purchases, or transact that business
for which 100/. of it would have been sufficient,
had there been no exemption from cash payments.
These conclusions will, we trust, be found to give
a definite form to the question of over-issue. All
will admit the general proposition, that a rise of
prices requires an augmentation of currency ; and
the advocates of the bank will hardly deny that
Sfid Orer-r JflW. 107
rise of prices at home, consequent on the depre-
ciatidn of our paper abroad, necessitates such in-
crease, as much as if it proceeded from taxation,
scarcity of corn, or any other cause. It. i.s in that
sense, therefore, that we understand the over-issue,
or rather the additional issue of currency) conse-
quent ori the exemption act ; ascribing to that act
about one-fourth of the rise (in all sixty per cent.)
that todk phtce in our prices during the tvventy^one
years of war from l?9tf to 1814* That act* without
being a direct cause, of enhancement, facilitated
and continued the enhancement proceeding from
other causes : it supplied currency in proportion
as our dependence on the Continent produced a
rise of prices; and it prevented the re-action
which, tinder other circumstances* would have en-
siled, avs in 1790$ from a scarcity in our circulating
medium.
Reasonable as this statement may appear, we
hardly expect it to receive a ready assent from
either partyj in particular from the bullionists, who
are accustomed to consider the irregularity of our
currency as open to a far heavier charge* as pro-
ductive of great enhancement without reference
to bur continental connection. But those who
carry the charge farther than we have: done, will
find themselves involved in all the difficulty atten-
dant on an attack of the stronghold of the advo*
crates of the bank, viz., the argument that the
public possessed the power of limiting over -issue.
Of that power the exemption act did not and
could not deprive the public t it contained nothing
calculated to convey the means of converting cur*,
rency into capital ; means which many projectors
about the middle of last century, fondly imagined
to reside in banks, and the non-existence of which
is so clearly explained by Dr. Smith in his account
108 The Questions of Depreciation
(Book II. Chapter II.) of the failure of the Ayr
Bank. Our notes were, after as before the exemp-
tion, nothing more than an instrument of circu-
lation, and one too which continued to cost the
holders nearly as much as prior to 1797« Obtained
by a sacrifice of interest, it was important to
every individual, whether a speculative or a regular
dealer, to circulate them as quickly as possible,
to retain them no longer than was necessary to
accomplish a specific purpose.
The truth of this argument may, without much
difficulty, be admitted, and the charge of convert-
ing currency into capital relinquished : still there
may remain a portion of doubt founded on the
increase of discounts and on the well-known truth
that projectors do not regard the sacrifice of in-
terest if it can procure them funds for their fa-
vourite schemes. True ; but this has been the
case in all periods, in peace as in war, and the
counteraction of it is to be sought in considerations
wholly distinct from acts of parliament, in reasons
which imperiously prescribe prudence to a banker,
and forbid his discounting other than short-dated
bills of undoubted character. Now these con-
siderations remained in full force after the exemp-
tion act. The loss from a single imprudent Joan
would have been feebly compensated to a banker
by the earning of his profit (always smaller than is
vulgarly supposed) on twenty, thirty, or even
forty transactions.
The opponents of the bank are, in general, po-
litical economists, and converts to the doctrines
of Dr. Smith. It is incumbent on them, therefore,
to point out in what particular mode the exemp-
tion act relieved bankers from the various hazards
described by Dr. S. as attendant on their business,
and Over -issue. 109
and as restrictive of the amount of paper currency.
Would not such an inquiry be likely to show that,
while in regard to foreign countries, that act de-
prived our paper of its main support, at home its
effect was of an indirect and passive nature ; con-
ferring the power, not of over-issue in the first
instance, but of issue in proportion to that rise of
prices which arose out of the circumstances of the
war ; the extension of our productive industry j
and the depreciation of our currency abroad ?
After these qualifications, we are ready to assent
to much that is advanced by the bullionists, ad-
mitting that bankers were led by the exemption act,
and by the flattering prospects of their customers
during the war, to make advances which under
other circumstances they would have withheld.
They were, we believe, in very many cases per-
suaded to discount bills which were never paid,
and to depart from their proper province by making
a permanent advance on such securities as land or
houses. The bank of England, in like manner,
dispensed on various occasions with a rule to
which they would otherwise have strictly adhered ;
we mean the conviction that the bills tendered for
discount had been drawn for real or bond fide trans-
actions. Such relaxation probably proceeded from
commendable motives: from a wish to prevent the
extension of bankruptcies in manufacturing towns,
in particular Glasgow or Manchester, at seasons
when a fall of prices, or the failure of some emi-
nent house threatened to involve in insolvency
hundreds of persons engaged in trade with inade-
quate capital. Still it must be admitted that the
bank directors went beyond their province, and that
these irregularities were productive of injury; all
that we advance is that the nature of that injury
was different from what the bullionists in general
110 The Questions of Depreciation
imagine, consisting in a loss to the bank, or in an
unavailing postponement of bankruptcy to the
trader, but not in an overcharge of 'our currency. The
notes issued, whether in town or country, whether
on good or bad security, all found their way into
hands whose interest it was to keep them as little
time as possible ; and any temporary over-issue
was thus of short continuance. In fact, the more
we examine the means possessed by the public of
returning the notes on the treasury, or withholding
discounts from the bank, the more we shall be
satisfied that they are such as to render permanent
over-issue impracticable ; and if we make a de-
liberate summary of the facts of the case, we shall
find them nearly as follows.
1. The exemption from cash payments was pro-
ductive of a saving to our banks peculiar to this
country, and enabling them to make advances at
a rate of interest lower than that of any other
country during the war.
2. Our dependence on the continent and the
non-convertibility of our bank-paper were pro-
ductive of its depreciation ; but,
3. Neither that depreciation, nor our lower rate
of interest, imply the existence of over-issue in any
other sense than that of an increase of currency
consequent on rise of prices, the extent of which,
as far as regarded the effect of the exemption from
cash payments, appears to have been about 15
per cent.
Such are the considerations which it seems ne-
cessary to address to the supporters of the bullion
report : the advocates of the bank do not require
arguments in detail, as they admit all that we have
advanced, in regard to the effect of mercantile and
political causes on the exchange. Their great
error is in refusing to acknowledge depreciation :
and Overissue. Ill
in not allowing, that from the moment we declared
our paper not convertible into the currency of the
rest of the civilised world, we rendered deprecia-
tion possible, and that a postponement of the evil,
or a mitigation of its extent, would necessarily de-
pend on the nature of our connection with the
Continent, on the degree to which our paper
should be put to the test. Those who still feel
a difficulty in believing depreciation to have ex-
isted at home, should begin by asking themselves
whether, without the non-convertibility of our
paper, depreciation would have existed abroad ;
or, if it had begun, whether it would have con-
tinued? If they refer to the evidence of Mr.
Goldsmid, and others, before the Bullion Com-
mittee, they will find, that had our currency been
of coin, or convertible into coin, 7 or 8 per cent,
would have been the greatest difference that could
possibly have taken place in the exchange even at
the time of the anti-commercial decrees. Let them
ask, in the next place, whether a reduction of the
quantity of our bank paper would not at any time
have raised its value, and, if carried a sufficient
length, have brought it to a par with coin ? And,
lastly, had not a portion of our rise of prices during
the war been owing to the state of our currency, is it
not likely that the fall since the peace, instead of
40 per cent., would have been only from 20 to 30
per cent., as in the rest of Europe ?
We shall now bestow a few paragraphs on an
interesting, but hitherto unnoticed topic, in the
history of our paper currency ; we mean the ques-
tion, whether, had the exemption act not taken
place when it did, it would have been resorted to
The Questions of Depreciation
at any subsequent aera in the war? This inquiry,
brief as we shall make it, requires an attentive
notice of our situation relatively to the Continent
at particular periods. — The preliminaries of peace
between France and Austria were signed at Leo-
ben in April 1797, a few weeks after the exemp-
tion act, and though the definitive treaty (that of
Campo Formio) was not concluded till the autumn,
there existed little doubt of its taking place, and
it is a well known fact, that, from several causes,
money, in the course of the summer, became less
scarce. This was also a time of naval success, and
though the dread of invasion continued, we have
the authority of the Bullion Committee (Report,
page 27) that the Bank ought to have met an
alarm of that nature by a liberal issue of their
notes. Be this as it may, it seems extremely un-
likely that at any time in 1797* after the preli-
minaries of Leoben, ministers would have adopted
a measure so new and questionable as the suspen-
sion of cash payments.
The succeeding year was one of peace on the
Continent, and of prosperity in this country. The
renewal of operations by land in 1799, was a mea-
sure less of the French government than of us and
our allies, a measure which, perhaps, we should
not have adopted without the confidence inspired
by the exemption from cash payments. In what
manner did the renewal of hostilities affect the
state of our circulating medium ? For some time
the effect was inconsiderable, but the case became
very different after the failure of the harvest : the
period of two years that elapsed from that failure,
until the certainty of a favourable crop in 1801,
would, without the exemption act, have recalled
all the difficulties of 1796, and we by no means
and Ore r -issue. 113
venture to assert that ministers would have for-
borne a recourse to that measure.
The preliminaries of peace with France were
signed in the autumn of 1801, and there ensued a
long interval of ease in regard to financial and
commercial affairs. Even in 1805, when we again
roused the Continent to arms, and subsidised not
only Austria, but Russia, the pressure on our ex-
change was temporary ; for this was no season of
indecisive warfare, of protracted operations : our
allies had now an antagonist who brought a cam-
paign speedily to issue ; and who, at Ulm and
Austerlitz, effectually relieved us from the pressure
of subsidies. In 1806 and 1807, part of our allies
continued in arms, but they were not supported
by ministers on a scale productive of pecuniary
embarrassment, and our corn imports were fortu-
nately not of a magnitude to press on the ex-
change.
There thus elapsed a period of seven years
without a recurrence of derangement in our con-
tinental exchanges ; but a very different prospect
was opened by the events of 1809 ; by our aug-
mented expenditure in the Peninsula, and the
necessity of large purchases of corn. Had our
bank-paper been at that time demandable in cash,
we should, doubtless, have experienced great dif-
ficulties, nor would the public, ardent in the cause
of Spain, have hesitated to support ministers in
any measure that promised an addition to our
pecuniary means. There is at the same time,
equally little doubt, that without the previous ex-
istence of the exemption act, and the confidence
inspired by its till then successful operation, we
should not have interfered with the freedom of
American navigation : we would have studied
114? The Questions of Depreciation
more carefully its effect on our resources, and
have cherished it as a fund for our continental
expences. Our ship-owners might have clamoured,
and individual members of the cabinet might have
been rendered converts to their views, but the
opinion of the bank directors would have been
hostile to such a measure ; and the danger pointed
out by the solitary voice of Mr. Baring (Inquiry
into our Orders in Council) would have been
brought before government with all the weight of
that powerful body.
The next and concluding object of our inquiry
is, to what degree did the exemption from cash
payments increase to government the means of
exertion on the Continent? By substituting at
home paper for metallic currency, it enabled us to
send abroad our gold coin, the amount of which,
very differently as it has been computed, (Bank
Committee Report, May 1819,) was, probably, not
far short of 20,000,0007. sterling; — a most sub-
stantial aid, doubtless, but one which was, in a
great measure, exhausted in the first three years
of trial, 1799, 1800, 1801. From that time for-
ward, the portion of gold coin in the country
appears to have been comparatively small : at all
events it was found quite inadequate to the de-
mand in the second period of trial, 1809 and 1810,
the exchange having fallen rapidly as soon as the
pressure on it became considerable.
The extent of direct aid arising from the ex-
emption act, seems accordingly to have been li-
mited to the amount of our gold coin ; but we
should enter into a much wider field were we to
calculate the augmentation of our financial means
bytthe other results of the act, the comparatively
moderate rate of interest, and increased facility of
and Over 'issue.
discount. After every deduction for exaggeration,
and after ascribing the greater share of our finan-
cial resources to the bold plan of raising the sup-
plies within the year, there still remains a large
amount referable to the effects of the exemption
from cash-payments. Of the extent of aid arising
from such a source, some idea may be formed by
those who have visited the Continent, and observed
how slowly productive industry advances in a coun-
try like France, where, even in peace, 6 or 7 per
cent, is the current rate of interest.
This benefit we experienced without much alloy,
until the five last years of the war, when the de-
preciation of our paper on the Continent caused
a sudden increase of our foreign disburse, and
some time after, an increase less sudden, but of
greater amount and permanency, in our expendi-
ture at home. The losses hence arising may, we
believe, without pressing the point to an extreme,
be carried to 1 00,000,000 /., and if we charge on
the exemption act a large portion of the present
distress of our agriculturists, conducive as that act
certainly was, to the fluctuation in the value of
money which has been, and will be productive of
great embarrassment, until wages, salaries, and
prices shall be accommodated to the new scale, it
becomes a question, whether the amount of benefit
derived from the exemption in the period preced-
ing 1809 has not been balanced, perhaps more
than balanced, by the loss and pressure of the sub-
sequent years. This point, however, we have no
wish to urge, and stiU less the speculative ques-
tion, whether, without the aid derived from this
act, our government would have carried on the
war so long, or on so expensive a scale : our
i 2
116 The Questions of Depredation and Over-issue.
object is statistical, not political ; and in calcu-
lating the advantage or disadvantage of a great
financial measure, we prescribe to ourselves the
rule of reasoning on events as they actually oc-
curred.
CHAP. V.
Agriculture.
WE propose dividing this very important branch
of our subject into three parts :
I. A historical sketch of our corn-trade, par-
ticularly since 1792 ; and the causes of the re-
markable fluctuations of price.
II. The present situation and prospects of our
agriculturists.
III. The question of a protecting duty.
SECTION I.
Historical Sketch ofvur Corn Trade.
The interference of our legislature with the
export of corn dates from a very remote sera ; but
our notice shall commence from the reign of
Elizabeth, a reign which, in its early years, ex-
hibited corn at as low a price as at any period of
our history, but became in its progress as remark-
able for enhancement as the reign of George III.
England was in those days, a corn-exporting
country, if the name of export can be said to
belong to a surplus produce hardly greater than
that of a single county in the present age. In
the beginning of the reign of Elizabeth (1562),
export was permitted by act of parliament, when-
ever our prices fell to 10s. the quarter for wheat,
and 6s. 8d. for barley and malt j prices remarkably
i 3
118 Historical Sketch of our Corn Trade.
low, when we consider that our coin was of the
same metallic value as at present. At this rate,
however, they did not long continue ; a consider-
able rise took place before 1570 ; and in 1593 the
export limit was extended by act of parliament to
20s. for the quarter of wheat, and 12s. for barley
and malt.
This doubling of price in the course of thirty
years, has not a little embarrassed political arith-
meticians : it is commonly attributed to the influx
of metallic currency from the American mines
before an outlet was found for it in India and
China, but from our experience of the limited
effect of such a cause in subsequent times, par-
ticularly since the late peace, we are inclined to
lay no little stress on the general prevalence of
war throughout Europe, from the middle of the
sixteenth to that of the seventeenth century. Be
this as it may, the enhancement continued progres-
sive; for in 1623 the export limit was raised to 32s.
the quarter for wheat, and l6s. for barley and malt.
In the succeeding age, particularly under Crom-
well, our markets were considerably higher, but the
rise was in some degree nominal, our coin, though
no longer debased by government, being deterior-
ated by clipping and filing, and brought, at times,
no less than 20 per cent, below its legal value, an
abuse not completely remedied till 1717»
Bounty on export. — In the reign of Charles II.
the prices of corn declined, and though several
acts were passed (in 1660, 1663, 1670), imposing
a duty on foreign corn, their effect in our
market was inconsiderable, because our growth
equalled, or more than equalled our consumption.
Prices accordingly did not rise, the agriculturists
Historical Sketch of our Com Trade. 119
complained, and the epoch of the Revolution was
marked by a new refinement of legislation in their
favour. The necessity of providing supplies for
the formidable contest with Louis XIV., led
government to contemplate a land-tax, and to offer
as a douceur to the landed interest, a premium on
export, which, accompanied by a prohibition of the
import of foreign corn, implied a certainty of
increase of price, and consequently of rent. The
chief provisions of the act were the payment of
a bounty of 5s. for every quarter of wheat ex-
ported, so long as our price, continued at or below
48s., and 2s. 6d. for every quarter of barley or
malt, so long as our home currency for that grain
did not exceed 24s.
A deficiency of documents in regard to the
extent of our tillage, prevents our tracing the
effects of the bounty act : it doubtless stimulated
production, and, under ordinary political cir-
cumstances, would, after creating a temporary
superiority of demand to supply, have in some
degree lowered prices ; but the market was, during
many years, kept up by causes not unlike those
which followed in our day the French revolution,
— war, and a more than usual prevalence of bad
seasons. The proportion of the latter in the
twenty years between 1692 and 1712* was not
inferior to that between 1792 and 1812 ; and as
our drain of men and capital for the war in these
days, made no slight approximation to that of our
late contest, there were wanting to complete the
analogy of high price only two of the characteristics
of our age, — - a depreciated currency and an annual
insufficiency of growth.
After the peace of Utrecht, the causes of fluc-
tuation in our corn-market were much simplified,
1 20 Historical Sketch of our Corn Trade.
and the half-century that succeeded presented the
following results :
Average price of wheat computed Inj the Winchester
quarter ', from purchases made at Windsor for
Eton College.
£ s. d.
For ten years ending with 1725 - 1 15 5
Do. ending with 1735 - 1 15 2
Do. ending with 1745 - 1 12 1
Do. - ending with 1755 - 1 13 3
Do. - ending with 1765 - 1 19 3
In what manner are we to explain so near an
approach to uniformity of price during so long a
period? By the maintenance of peace during
thirty-five years out of fifty, and by an exemption,
in general, from bad seasons. The case was the
same with our neighbours, as appears from the
returns (see Appendix) of the prices of corn in
France. In that country, as in England, the corn
market during the fifty years in question, presented
an average considerably lower than that of either
the preceding or succeeding half-century.
During the whole of this period, we were export-
ers of corn ; the quantity varied, of course, from
year to year, but was almost always sufficient to
establish the fact, that the market price in England
was little higher than throughout the maritime
part of the west of Europe ; we mean the Nether-
lands, Denmark, the North of France, and the
north-west of Germany. The cheapness was
materially greater only in inland districts of the
Continent, where, as at present in Lorraine, the
south of Poland, or south-west of Russia, the
want of water conveyance kept down the market.
Historical Sketch of our Corn Trade. 1 M i
During this half-century of stationary price, and
of scanty agricultural profits, — this period, when
inclosure bills were so rare, and lease after lease
was signed in long succession, without any idea
of increase of rent, it must not be inferred that
our tillage was on the decrease : it evidently re-
ceived an extension, but somewhat more slowly,
as appears by the ultimate result, than the increase
of our population.
After 1764, began a new aera ; our consump-
tion equalled, and somewhat surpassed our growth,
so that our import predominated over export.
This change, so unsuitable to a season of peace,
so contrary to calculation, at a time when addi-
tional labour and capital were applicable to agri-
culture, was owing to several reasons, — an unu-
sual proportion of bad seasons ; the increase of
consumers from the extension of our manufac-
tures, particularly cotton ; and in part, doubtless,
to the general disposition to withhold surplus ca-
pital from the so long unprofitable investment of
agriculture.
Act oflTJS. — The rise in our market, whatever
may have been its causes, was such in the ten
years preceding 1773, as to lead to an act of a
new kind ; an act implying that in regard to corn
England was to be considered rather an importing
than an exporting country. It permitted the im-
port of foreign wheat whenever our own reached
or exceeded 48s, the quarter; a limit just and moder-
rate, which, while it relieved the consumer from an
exorbitant rise on the occurrence of a bad harvest,
was productive of no injury to our agriculture,
the prices of corn continuing to afford a steady re-
122 Historical Sketch of our Corn Trade.
turn for the labour and capital employed. Our
market now exhibited all the advantages of supply
duly proportioned to demand : in some years a
partial import was necessary; in others, the
nature of our crops enabled us to export; but
after 1788, a time of extension and prosperity to
most of our manufacturers, import decidedly pre-
dominated.
In 1791, the landed interest, not satisfied with
the advantage secured to them by the act of 1773,
carried it a step farther, and obtained a law pre-
venting import, except when our wheat should
reach or exceed the price of 54s. the quarter.
Whether this measure would have operated to
raise prices, or by directing an extra share of ca-
pital to tillage, would have, in some degree,
lowered them, we had no opportunity of ascertain-
ing, so soon was it followed by the war of 1793.
The late Wars. — The wars of the present age,
attended by an unparalleled drain of both labour-
ers and capital, could not fail to raise the price
of corn. For some time, however, the rise
was gradual, the average price of our wheat, dur-
ing the first seven years of the war, not exceeding
63s. ; but two successive bad harvests (1799 and
1800) altered entirely the state of the market, and
carried prices to a rate (6/. and upwards) till then
unprecedented in our history. The seasons of
1801, 1802, and 1803, were favourable, and pro-
duced a fall to nearly 3/., a fall which, in concur-
rence with the demands of the Treasury on the
land-holders for our renewed contest with France,
led to the corn law of 1804, by which the import
of foreign wheat was in a manner prohibited, until
Historical Sketch of our Corn Trade. K> ;
our own should be at or above 63s.9 and taxed till
our own reached (Ms. These prices, high as they
then seemed, were soon surpassed by the currency
of our market, in consequence, partly of an unfa-
vourable season (1804), partly of the continued
drain of hands and capital for the war. Thusc
causes operated in a greater or less degree over
the rest of Europe, and greatly lessened the
relief which importation would otherwise have
afforded.
The non-convertibility of our paper currency
had existed since 1797* and passed, in vulgar es-
timate, for the principal cause of this progressive
rise ; but the degree of enhancement proceeding
from it was slight (not exceeding 3 or 4 per cent.)
until 1809, when it was suddenly accelerated by an
unfortunate concurrence of circumstances; ex-
penditure in Spain, the stoppage of neutral traffic,
and, above all, a deficient harvest. From this time
forward, our purchases of foreign corn were made
at a sacrifice of 18, 20, or 25 per cent, a loss incurred
on the whole of the very large sum of 7> 000,0007.
expended on the purchase of corn in 1810. The
currency of our market was now between 51. and
6/., and though, for one year, a rise was prevented
by the abundant harvest of 1810, the case became
very different after that of 1811, although only
partially deficient. A supply from abroad was
now, in a manner, out of the question, partly from
the anti-commercial edicts of the time, more from
our want of specie and the fall of our bank
paper. Accordingly, during 1812 and 1813, our
prices averaged above 6/., a rate ill calculated to
prepare our farmers for the great and general fall
to be expected from the approaching change in the
state of Europe.
124 Fluctuations in the Price of Corn.
The Peace of 1814. — Never were the effects of
peace more promptly or generally felt, than in
1814 ; import co-operated with favourable seasons ;
the price of corn fell rapidly, and it was in vain
that parliament passed, early in 1815, a new act,
forbidding import till the home-price of our wheat
exceeded 805. : the market continued low, and for
a time exposed both the farmers and the public to
all the evils of sudden transition. In 1816 a defi-
ciency of crop, more serious both in England and
the Continent, than any in the present age, re-
versed this state of things, raised prices, and led,
during 1817 and 1818, to an import of unexam-
pled magnitude. But when, in the early part of
1819, the effect of scarcity was past, our market
fell, and in the autumn of 1820, an abundant
harvest brought it to the state of depression under
which it has ever since remained.
Fluctuations in the price of Corn, since 1792*
We are now to examine the state of our market
during the last thirty years, with a view to its
effect on the situation of farmers. The war com-
menced at a time when corn was abundant, and
prices moderate, wheat averaging about 53s. a
quarter. The immediate effect of the assumption
of a military attitude, was to withdraw from agri-
culture, a portion of labour and capital, to produce
a rise in the rate of interest, and to necessitate the
abandonment of many projects of improvement,
such as drainages, canals, and other undertakings,
dependent for success on a low rate of interest.
This was productive of very general distress, but
had little effect on the corn market, the stock in
hand being abundant. In 1794 and 1795, a partial
19
Fluctuations in the Price of Corn. 125
deficiency in the crops, joined to the continued
operation of the war, produced a considerable rise,
and carried wheat, notwithstanding a large pre-
mium on import paid by government, to 4/. and
upwards. This, however, was of short duration :
in 1796, the amount of import, followed by a fa-
vourable season, reduced our market ; in 1797»
wheat did not, on average, exceed 31. 2s. and its
further fall in 1798 (to C2L 14s.), showed how ef.
fectually a favourable season could, even in the
midst of war, counteract the charges attendant
on the culture of corn. These charges without
being at all on a par with the burdens of an after-
period, were such as to make many of our farmers
hold the language of complaint, and consider the
increase of expence from the war as materially ex-
ceeding the increase of price.
This may be termed the first aera in the war,
which, so far, had produced no material rise, either
in rents or in the average price of corn. The
case, however, now underwent a complete change,
the occurrence of two bad seasons in succession
(1799 and 1800) raising prices to a rate, 51. and
6/., wholly unknown in the history of our corn
trade. What was the effect of these seasons on
the situation of our farmers ? At first unfavour-
able, because a rise in price (Evidence Agricul-
tural Committee, p. 36.) forms no equivalent to
a deficiency of crop ; but prospectively, it was
advantageous, the stock on hand being so reduced
as to open a prospect of high prices for some time
to come. Accordingly, in spite of the additional
burdens of the period, among others the income
tax, farmers and speculators in land were induced
to contract for rents at an advanced rate. This
spirit showed itself strongly ;in 1800: and 1801,
126 Fluctuations in the Price of Corn.
but received a sudden check from the favour-
able harvest of the latter year, and the unexpected
conclusion of peace with France.
Our wheat now (1802) fell to nearly 31. the
effect of high prices was pronounced not only tem-
porary but fallacious ; land was almost every where
declared to be over-let, and the consequent stagna-
tion, would, doubtless, have led to a general re-
duction of rents, when the scene was once more
changed by war. This was followed by the defi-
cient harvest of 1804 ; markets now rose, rents
were maintained and augmented, the import of
corn was subjected to additional restrictions, and
at home, all the causes which swell the cost of pro-
duction, rise of labour, taxation, interest of mo-
ney, operated in conjunction. The effect of all
these, was to carry wheat during 1805, 6, 7> and 8,
to an average of somewhat more than 4/., although
the seasons were not unfavourable.
This may be termed the middle epoch in the
period of war : agriculture had become profitable,
and the style of living of our farmers was con-
siderably altered, but their profits were far from
unreasonable, their charges being greatly aug-
mented. Of this the best proof is, that all the
motives to extension of culture, did not produce
a sufficiency of growth for consumption. There
prevailed among farmers a general confidence,
an extension of outlay ; but their pecuniary ad-
vantage was limited to increase of income, to the
more comfortable support of their families ; a
substantial addition to property was, as yet, ex-
perienced by very few.
We now come to a new aera, — the five last years
of the war, — a time when farming profit, notwith-
standing an increase of charges, materially ex-
Fluctuations in the Price of Corn.
ceeded the preceding ratio. In 1809, a deficient
harvest raised prices, and the imports from the
Continent in 1810, though uncommonly large,
could not bring them below an average of 51. or 6/.,
because our currency was now greatly depreciated.
No class derived such benefit from the fall of our
bank paper as our agriculturists, their rent and
taxes being paid in it without deduction, while
in their sales they received a full allowance for its
depreciation, not only in their corn and cattle,
but in their butter, poultry, and other articles. It
was at this time that full execution was given to
the anti-commercial decrees of Bonaparte, and to
our Orders in Council, measures which, without ab-
solutely stopping neutral navigation, added greatly
to its cost, and left us more and more to our own
resources. This was the season also of extended
military operations in Spain, and of the appropria-
tion, in that country and in Portugal, of supplies
of flour from the United States, which might other-
wise have found their way to England. In 1811
our crop was not equal to our consumption, and in
consequence of the want of import from the Con-
tinent, our markets experienced a great advance.
Rents were now raised rapidly and generally : poor-
rate, tithe, and labour received a great increase,
and the collection of the property-tax from farmers
became more rigorous ; which were drawbacks
serious, certainly, but more than outweighed by
the benefit of high price. In 1812 and 1813 the
harvests were, on the whole, favourable ; while the
augmented depreciation of our bank paper (now
between 20 and 30 per cent.) discouraged im-
port, and kept our prices of wheat at C/. and
upwards.
128 Fluctuations in the Price of Corn.
At last came peace, followed by the cessation
of so many of the causes that had produced the
enormous rise of prices: our bank paper reco-
vered : corn had fallen on the Continent : the
expence of freight was greatly reduced, and con-
siderable imports took place. Our market ex-
perienced a rapid fall in the summer and autumn
of 1814 ; a fall confirmed by other causes, — a re-
duction in the price of labour ; in the interest of
money ; in taxation ; — while the whole was neces-
sarily accompanied by a diminution of such charges,
(seed, horses, manure, tithe,) as follow, or rather
are identified with the price of grain. A new
corn-bill was loudly called for ; that of 1815 was
passed, and our ports shut to import : but the
amount of the stock on hand, and a crop fully
adequate to our consumption, kept prices at a low
rate, wheat fetching hardly 31. a quarter. Our
agriculturists now experienced all the evils of a
sudden fall : rents, though lowered, remained un-
paid ; farming-stock was sold at a ruinous depre-
ciation ; tithe fell rapidly ; and poor-rate, though
not increased in amount, proved, under such
altered circumstances, a ruinous burden. In this
state of things, the want of warmth and continued
wet of the summer of 1816, were viewed by many
of our agriculturists as benefits, as the means of
clearing the market of the over-stock of corn, of
giving efficiency to the recently enacted bill, and
of bringing back better prices. Such, in fact,
were its results : the crop, though at one time
promising, never ripened in the colder situations ;
our markets rose, and when, after a time, they
reached the limit that allowed of import, the sup-
plies from the Continent were, in consequence of
Fluctuations in the Price of Corn. 129
an almost equally bad season there, paid for at
such a price that our currency for the year 1817
exceeded 94>s. a quarter.
We are now arrived at another epoch in the
fluctuating history of our agriculture. Though
the import of foreign corn continued during 1818,
the average price of wheat in that year exceeded
80s. The steadiness of this price, the revival of
our manufacturing industry, the moderate interest
of money, renewed the hopes of our farmers, and
created, if not a rise in the amount of rent, a
general briskness in making offers. But our im-
ports had been over-done, and our crop in 1819
being an average one, the market experienced a
dullness and progressive decline. It was in vain
that farther import was suspended ; our market
continued depressed, and all eyes were fixed on
the harvest of 1820, with the singular view of
discovering whether its abundance would prove
a source of embarrassment to the landed interest.
The crop, without being particularly favoured by
the season, was found equal to our consumption,
which, joined to the magnitude of the stock on
hand, produced a great fall of prices : and the
crop of 1821 being in like manner accounted an
average one, our markets continued in a very de-
pressed state.
Tabular
ISO Fluctuations in the Price of Corn.
Tabular Statement of the Nature of the Crops and Average
Prices since 1 790. Ayerage price
Years. °f wheat.
1790, 1, 2. Peace and favourable sea-1 __ £" s' ^
sons - - -J
1793. War, but season favour- 1
able - -j
1 794, 5. A partial deficiency of crop 1 Average of }
in each year - - J 1 795 & 1 796 j *
1796, 7, 8. Seasons less unfavourable j $?£?£ Q°f 1 3
LiWi », y j
1799, 1800. Bad seasons ' { fsOO^l 80°!^ 6 7 9
1801. A good crop followed by^
peace and favour able (Average of]
seasons in 1802 and (1802, 3, 4 J*
1803 -)
1804. A deficient crop, followed} Average ofl
however by average /-the years v 4 20
crops in 1805, 6, 7. -) 1805, 6, 7, 8 )
1 808. A partial deficiency - ) Average ofl
1809. A great deficiency - -/-the years V 5 9 0
1810. Agoodcrop -)1809&1810)
1811. A deficiency - - -I Average ofl
1812,13. Favourable crops, but cur- > the 3 years V 5 18 8
rency depreciated - } 1811, 12, 13 )
1814. A crop not exceeding the"
average, but a consider-
able import and a great
decrease of the charge
of production conse-
quent on the peace
Average
during the
years 1814,
15, 16
3 11 5
1815. A full average crop
1816. A great and general de-
ficiency - - -J
1817- A crop not exceeding an"| Average oQ
average - I the yearsf ^ Q
1818. A crop not exceeding an (1817 and(
average - -J 1818 )
1819. A crop somewhat below)
the average - -j
1820. A crop exceeding the 7 o ^ 7
average - -j
1821. An average crop - 2 14 2
The deficiency of a particular year is felt little on the average
price of that year, but greatly in that of the succeeding year,
being seldom ascertained till late in autumn.
The prices in the above table are taken from the Windsor
market to 1813 inclusive; afterwards from the average return
for England and Wales, which is somewhat lower than the
price at Windsor
Fluctuations in the Price of Com. 131
Having now sketched the principal facts in the
progress of our agriculture, we shall bestow a few
paragraphs on the
Causes of Fluctuation in the Price of Corn.
It is common to ascribe a great share of these
fluctuations to the corn laws ; but those who have
written and spoken on that subject, whether in
favour of or against these laws, would have per-
formed a useful service had they been more sparing
of argument and more attentive to the facts con-
nected with our corn trade. The result would,
we believe, have been a discovery, that the effects
attributed to our corn laws, whether by their sup-
porters or opponents, have4 been greatly over-rated,
and that parliament, in attempting to regulate the
currency of our markets, might, as was remarked
by the late Mr. Whitbread, be compared to the phi-
losopher in Rasselas, who regarded the sun, wind,
and rain as under his control. The bounty act of
1689 had, doubtless, for some time, an operation
favourable to landlords, enabling them to let their
lands more readily, perhaps on somewhat higher
terms ; but after the stimulus of war was removed,
the bounty proved altogether unequal to the mainte-
nance of prices, and certainly caused to our coun-
try gentlemen, as members of the community at
large, a loss greater than the benefit it brought
them in the capacity of landlords : their prosper-
ous day did not arrive until after 1764, when their
boasted aids, export and bounty, disappeared to-
gether. From that time corn maintained a steady
price, or rather experienced a gradual rise, the
causes of which, as the bounty was now inopera-
tive, will, we believe, be readily admitted to have
been
Fluctuations in the Price of Corn.
First, and principally, an unusual proportion of
unfavourable seasons between 1764 and I7J3.
Secondly, that the increase of capital and labour
applied to our agriculture was not in proportion to
the increase of our population. This arose from
various causes : the wars of 17^6 and 177<5 '• the
extension of certain manufactures, particularly
cotton ; and an impression, founded on the expe-
rience of the preceding half century, that agricul-
cure was an unprofitable pursuit.
We now come to the act of 1773, the only act
which seems to have had an operation steadily ad-
vantageous to landlords ; our average price of
wheat from 1773 to 1788 being about 49$. a quar-
ter, while in France it did not (see Appendix)
exceed 38s. or 39s., and at Dantzic 41s. a quarter.
Here was a real and steady superiority of price,
the maintenance of which was owing in part to the
American war, but in part also to the moderate
nature of the act, the price of 48s., pointed out by
it as a kind of limit, offering no temptation to
capitalists to transfer their funds from trade or
manufacture to land. Had the import limit been
54s. there seems little doubt, after the proofs we
have had, of the practicability of extending our
tillage, that it would, ere long, have been over-
done, and our growth rendered not only equal
but superior to our consumption. By asking little
the landholders obtained a certainty, and this ex-
ample of the success of interference, when inter-
ference is very slight, has a claim to their serious
attention at the present moment.
In the period from 1793 to 1814, the corn laws
were in general inoperative, the currency of our
market being usually above the import limit, and
our ports consequently open. This was equally
Fluctuations in the Price of Corn. 183
the case after the act of 1804 ; an act which had,
we believe, the effect of enabling landlords to
make a rise of rent more general and more ap-
proaching to uniformity over the kingdom in point
of time than would otherwise have been practic-
able, but which had certainly no effect in raising
markets, its tendency to extend tillage balancing or
more than balancing any tendency to keep up prices
by an occasional and short exclusion of foreign
corn. What then were the causes of the unexam-
pled rise of prices between 1793 and 1814?
The unusual number of bad or indifferent sea-
sons, not less than six (179*, 1799, 1800, 1804,
1809, 1811,) in the course of eighteen years.
The great demand of men for military service,
in consequence of which the increase of the pro-
ducers of corn by no means kept pace with the in-
crease of the consumers.
The increase of taxation, and consequent rise
in all farming charges.
The prevalence of all these causes on the Con-
tinent, and consequent limitation of import.
The depreciation of our currency, particularly
after 1809-
Of all the departments of our national industry,
none received so continued a stimulus from the
war as agriculture. Our manufactures, particu-
larly those of cotton and hardware, experienced at
times a greater impulse ; but the nature of manu-
facture admitting of more speedily increasing
supply in proportion to demand, the briskness was
often temporary, and followed by a season of dis-
couragement. Our tillage, on the other hand,
was hardly at any time brought on a par with our
increasing population, so that the stimulant of
a demand, equal to or greater than the internal
K 8
184- Fluctuations in the Price of Corn.
supply, prevailed throughout almost the whole
period.
Causes of the Fall of Prices since the Peace. —
These have been partly peculiar to this country,
partly common to it with the Continent of Europe.
Of the latter description were
The application, in a great degree, of labour, in
a smaller, of capital, to tillage, since the reduction
of military establishments.
A succession of seasons more favourable than
during the war $ the Continent, like England,
having had, since the peace, only one bad summer
(1816) ; and if, from the magnitude of the failure
on that occasion, we consider it equivalent to two
seasons of ordinary deficiency, the proportion is
still considerably more favourable than during the
war.
Next, as to the causes of decline peculiar to this
country, we have
The re-instatement of our paper currency ; and
The great reduction of freight and other charges
of transport ; a principal cause of the magnitude
of the import in 1817 and 1818,
The operation of several of these causes is suf-
ficiently obvious, but the amount of additional
labour lately applied to tillage may be doubted by
those who compute the extension of our growth
by the number of inclosure bills, and who have
remarked (see Appendix) the great decrease in
such acts since the peace. To those persons we
would observe that the most productive husbandry
is that which is practised on land already under
cultivation, and in support of this opinion we refer
them to the evidence of a practical farmer, Mr. Be-
cher, of Suffolk, given before the Corn Committee
Fluctuations in the Price of Corn.
of 1810. When asked whether he considered the
import limit of that time (66s.) as too low, Mr. 13.
answered, (Evidence^ p. 55.}
" I look upon the price at which wheat is now
imported not sufficient to encourage the culture
of wheat to the extent that it is necessary for the
kingdom, but I believe there is not the least doubt
if the import price was at S4s. instead of 63s.,
or even higher, that the effect would be, upon a
notice given, that that would be the import price
after the 30th September in any year ; that the
consumption of the country would be fully pro-
vided for at home, even in the first year after such
notice."
Could it be provided for in the first year without
cross-cropping ?
" 1 believe that the lands now sown with wheat
are not in the high state generally that they might
be ; and this I am aware of j that every additional
hoeing of the wheat crop will give, upon an average,
at least two bushels an acre. I have tried the ex-
periment more than once in the same fields, by not
hoeing, hoeing once, and hoeing twice: the differ-
ence has been — with one hoeing two bushels an
acre more and upwards, and in that hoed twice
four bushels more."
This opinion may be followed up by asking
what amount of additional labour may be con-
sidered at the disposal of our farmers since the
peace ? During the war the proportion of able-
bodied men under arms, exclusive of volunteers
and local militia, was about one in ten : now sup-
posing the total population of Great Britain and
Ireland employed in agriculture to have been
in 1814, agreeably to Mr. Colquhoun, about
5,600,000, of whom the able-bodied part (one-
K 4
136 Fluctuations in the Price of Corn.
fourth) were 1,400,000. Of these, in war, the
public service removed from home nearly one-
tenth, say - - 130,000
Whereas in peace the number with-
drawn is not 30,000
Leaving a difference of - - 100,000
or one-fourteenth of the whole. And if we calcu-
late the produce of their labour not at a fourteenth
but at a twentieth of our crop, the result is an ad-
dition to our supply of a fortnight or three weeks'
consumption of our whole population, a quantity
which, small as it may seem, was considerably
larger than our average import during the war.
This addition is wholly distinct from the general
progress of our population, in which we consider
the increase of consumers as balanced by that of
producers : and as no article is so much influenced
as corn, (Evidence, Agricultural Committee, pp.
229 — 240.) by a slight addition to or subtraction
from the usual supply, an increase, such as we have
mentioned, is sufficient to cause a total change in
the market.
SECTION II.
Situation and Prospects of our Agriculturists.
HAVING in the preceding section explained the
causes of the augmented supply and reduced prices
of produce since the peace, we now proceed to
exhibit their result ; and to convey in a mode as
definite as possible, an idea of the actual situation
of our landlords and farmers.
Estimate of our Agricultural Produce and Rental.
Produce. — Annual value of agricultural pro-
duce, (not only corn but wool, hemp, flax, timber,
&c.) raised in Great Britain and Ireland, exclusive
of what is appropriated to seed, or to the food of
horses and horned cattle.
In 1812, our produce, exclusive of seed, was
computed by Mr. Colquhoun, in his well-known
work on the " Resources of the British Empire,"
(pp. 66—89.) at - - ^217,000,000
Deduct pasture and all produce
used for the food of horses,
horned cattle, and the lesser
animals, about - - - 100,000,000
Value of annual produce for the
food of man, or for the purposes
of manufacture - -^l 17, 000, 000
Since 1812, prices have fallen above 70 per
cent.; but as Mr. C.'s estimate was made greatly
below the currency of the time, the deduction
applicable to his results does not exceed 30 per
cent., which, large as it may be, is at present, or
138 Situation and Prospects
will in a few years, be balanced by the increase of
our produce, leaving the value as stated by Mr.
Colquhoun. This great increase of our produce
is sufficiently indicated by the state of our mar-
kets, and supported by several very powerful con-
siderations; viz.
The great addition to our population, (17 per
cent.) since 1812.
The excess of the population and produce of
Ireland over Mr. Colquhoun's estimate. And
The extra proportion of hands furnished to
agriculture since the peace by the discharges from
the militia and army.
Rental — In 1814 the rental of England, Wales,and
Scotland was carried, as appears by the property-
tax returns, to nearly ^43,000,000
Add for Ireland, (con-
jecturally estimated) 10,000,000
Together ^53,000,000
Add for all omissions and allowances
on the property-tax returns, a sup-
posed amount of - ., 5,000,000
Since 1815, a great increase has taken
place in our produce, but this
having been chiefly on lands already
under tillage, we add for the ex-
tension of rent-paying lands since
the peace only .... 2,000,000
Making in all - ^60,000,000
Deduct for all abatements of rent since the
peace, made, making, or which must, ere long, be
made, (the preceding statement being calculated
on the full war rents,) 40 per cent., <^24,000,000
Remainder ^36,000,000
of our Agriculturists. 139
which will probably form the rental of Great
Britain and Ireland, when the price of wheat shall
be steadily between 55s. and 60s. a quarter, and
when \he cost of production shall be lowered in
proportion. Large as is this abatement of rent, it
is less great than the fall in the price, of produce,
but the improved husbandry has of late made con-
siderable progress, and the cheapness of provisions
has caused a considerable decrease of poor rate.
In no class of the community has the effect of
transition been either so severe or so long con-
tinued. Great as has been the fall in the price of
agricultural produce, that of income is at present
much greater. If to the rental of landlords in the
latter years of the war, we add the income of our
farmers, we shall find, (see Property-tax returns
for 1812, printed in 1816,) including Ireland, an
aggregate of more than j£l 00,000,0007. This, it
must be allowed, exceeded all due bounds, and a
reduction to J5 or even to 70,000,000/. would
have been nothing more than a fair participation
in the general abatement attendant on peace ; a
relinquishment of a monopoly for a fair average
profit : but at present the income of farmers is
almost totally suspended, and such rents as they
stfll pay are extorted from their capital. Of the
extent of national injury arising from this state of
things, some idea may be formed from the follow-
ing estimate of the proportion borne by agriculture
to the productive industry of the country at large.
Proportions
in 100,
Proportion of the public revenue arising from agricul-
ture at the reduced prices of peace, about - - 30
Proportion of our population dependent for employ-
ment on agriculture (see the Population Return of
J821) in Great Britain, distinct from Ireland - 33
140 Situation and Prospects
Proportions
in 100.
Proportion of national property annually created,
being the amount of corn, grass, wool, hemp, flax,
timber, &c. after a suitable deduction from Mr. Col-
quhoun's estimate - - 45
Proportion of national capital affected by the pro-
sperity or decline of agriculture, being the value of
our land, farming stock, and houses on farms and
estates, adopting Mr. Colquhoun's mode of estimat-
ing, but making a great abatement on the prices of
1812, (see Appendix to the chapter on National
Revenue and Capital) above - 60
After this statement, it is needless to expatiate
on the magnitude of the injury arising to our ma-
nufacturers, our shop-keepers, or the Treasury,
from the distress of agriculture : nor need we go
farther to account for the chief part of the national
embarrassment in 1816, or of our revived pro-
sperity in 1818. It is almost equally idle to discuss
the question, whether the agriculturists are en-
titled to our sympathy, or whether their profits,
towards the close of the war, were not such as to
exceed all legitimate proportion. Their case in-
volves a question of policy fully as much as of
justice, — the losses of any great part of the nation
forming the losses of the whole, and any deficiency
in their contributions to the exchequer falling ne-
cessarily on the other classes.
Present Situation of our Landlords and Farmers.
— A reduction in the style of living on the part of
farmers was unavoidable, their profits having con-
sisted less in acquisition of capital than in addi-
tions to income — additions which were great only
in the latter years of the war, and arose chiefly
from the depreciation of our currency. With
landlords the case was different : their increased
of our Agriculturists. 141
receipts bad been less connected with depreciation,
while their possession of capital exempted them,
from any immediate necessity of altering their
scale of expence. Time has been afforded them
to make a deliberate distinction between nominal
and real income ; between that decrease which
actually deducts from the power of expenditure,
and that which, in consequence of the rise in the
value of money, does so only in appearance.
During the war they had an opportunity of ob-
serving how closely augmented expenditure fol-
lowed augmented income ; it now remains for
them to try reduction, and to carry it to the length
pointed out by the fall in the price of commodities.
That fall does not, we allow, apply to them so
largely as to the lower and middling classes : it has
taken place chiefly in the necessaries of life, and,
as yet at least, holds much less in regard to the
charges incurred by the higher ranks, such as
assessed taxes, salaries, wages, professional fees, to
which we may add education at our public schools
or universities, along with the cost of articles of
luxury, such as wines, plate, and ornamental fur-
niture. Yet even in these reduction has com-
menced, and may be carried much farther when
the upper classes think proper to hold a decided
tone, and retrench abuses engendered in days of
abundance.
On comparing the situation of our landlords
with what it was in the latter years of the war, we
are led to compute the nominal decrease of rent
at forty per cent., the real decrease at twenty per
cent. ; assuming that the remaining twenty per cent,
are counterpoised by reduction in their expendi-
ture either already made or perfectly practicable.
We go, perhaps, too far in supposing an actual
142 Situation and Prospects
loss to the extent of twenty per cent. : if we make
allowance for the repeal of the property-tax, the
loss should, doubtless, be less ; but, without press-
ing that point, we proceed to ask from what source
this extra income arose during the war ? Partly
from the general rise of profit at that period, more
from an advantage peculiar to agriculturists, the
monopoly of the market in consequence of the
continued insufficiency of our growth. Advan-
tages such as these are necessarily temporary, and,
could the nature of our situation have been fore-
seen, would have been considered by landlords as
at a close, as soon as our political circumstances
were changed, and the country became assured of
peace.
But rents even on this reduced scale, are not,
it may be said, paid at present, nor are our prices
equal to the cost of production, leaving rent
wholly out of the question. We answer that no
calculation can be founded on the circumstances
of this season of transition and over-stock ; but
as a great part of the distress arises from temporary
causes, (excess of import, crops unusually large,
and the tardy reduction of farming charges), the
better plan is to calculate probabilities, and to
reason on a rate of prices and rent which though
not yet established, is rendered likely by a con-
currence of circumstances.
Our principal landlords, convinced of the in-
efficacy of corn laws to keep up the market,
have given decided examples of reduction, to the
extent of the 40 per cent, assumed in the preceding
table. Supposing, for the sake of illustration, that
of this deduction 15 per cent, had been in general
made prior to the examination of the witnesses, be-
of our Agriculturists. 143
fore the Agricultural committee (March and April,
1821) ; there then remained to make a farther
abatement of 25 per cent , an abatement repeatedly
alluded to in the evidence as necessary, acceded
to by many individuals since that time, and which
can hardly fail soon to become general, sanctioned
as it is by great examples, and imperiously required
by the exigency of the case. We shall suppose,
therefore, that what is as yet partial has become
general, and that our landlords throughout the
kingdom, aware, on the one hand, of the increased
value of money, on the other, of the necessity of
sacrificing a part to save the remainder, have con-
sented to this reduction ; also, that the farmers suc-
ceed in accomplishing a corresponding diminution
in labour and the other charges of culture. Were
this grand point adjusted, the prospect of our
agriculturists would be cleared of a part of its
gloom ; their horizon would brighten, and it would,
we might hope, be no longer doubtful whether
ruin or recovery is to be their lot.
Supposing this reduction effected, what price,
it may be asked, would enable the farmer to dis-
charge his engagements, and to earn a fair support ?
Sixty shillings for a quarter of wheat in the coun-
ties adjacent to the metropolis, and between fifty-
five and sixty shillings in those where labour is
cheaper. This estimate is supported directly by
the opinion of Mr. Rodwell, (Evidence, Report of
1821, p. 86.), and of Mr. Brodie, (p. 335.) while
indirectly it is confirmed by all who, when desired
to say the cost of raising wheat without rent, fixed
it under last year's charges, between 55s. and 60s.
A deduction of 25 per cent, would bring the cost
to 45^., and a market price between 55s. and 60s.
would obviously supply the fund requisite for the
144 Situation and Prospects
payment of the rent which is in general a fourth
or a fifth of the produce.
How far is the probability of 55s. or 60s., as a
medium price in peace, confirmed by other circum-
stances, in particular by the average price of other
countries ? Wheat at Dantzic has averaged, (Evi-
dence, Agricultural Committee, p. 366.) during the
last half century about 45s. a quarter j while in the
more adjacent parts of the continent, we mean the
Netherlands, and the north of France, 45s. a
quarter, are generally considered sufficient for the
indemnity of the farmer. This difference sup-
poses an advance of 20 per cent, to our agricul-
turists in consideration of their heavier burdens.
After the high prices to which we were so long
accustomed, an average of 55s. or 60s. appears ex-
tremely low : but in the payment of labour, in the
power of purchase, generally, it at present is, or
ought to be equal to 80s. in the late war, and the
point is not that which may be expected, but that
which it is practicable to attain. Add to this,
that under such a price our manufacturers would
probably acquiesce without complaint, considering
our national superiority in fuel, navigation, and
command of capital, such as to admit, without
much hazard, of a relative disadvantage in the
cost of subsistence.
The probability of an average between 55s.
and 60s., is further confirmed by a retrospect
to history, to periods in which our agriculture
was prosperous. In 1804, a price varying from
63s. to 66s. was accounted sufficient, under
charges considerably heavier than those we have
now in prospect. During the thirty years be-
tween 1763 and 1793, our farmers made few
complaints, though the average price of wheat
of our Agriculturists. Ho
was 49-?. a quarter, or about 15 per ceut. less than
\ve consider necessary for the present time. If we
compare the farming charges on the reduced scale
we have anticipated with those previous to 1793,
we shall find that the excess of the former, is, or
ought to continue great in one point only, tax-
ation. This leads naturally to the inquiry, how
far the taxation of the present time exceeds that
of 1792. In treating this subject in a subsequent
chapter, we shall have occasion to fix the increase
at 10 per cent, on the income of the nation at
large : in the case of the farmers, we shall suppose
that from the pressure of poor rate, the additional
burden is nearly 20 per cent. This is burden on
income, and the annual produce of a farm being
computed by surveyors at three or four times the
tenant's income, (see the Property-tax return, 1810),
it follows that 20 per cent on income will be de-
frayed by an addition of 5 or (j per cent, to the
market price of the produce ; leaving nearly 10
of the 15 per cent, rise supposed by our calculation,
as a counterpoise to a variety of charges distinct
from taxation, which are greater at present than in
1792, and which it will be a task of great time
and difficulty to reduce.
This mode of reasoning, fair as it may seem to
some, and sanctioned as it is by the example of
of such men as Earl Fitzwilliam and Mr. Coke, may
appear in a very different light to others, who,
whether landlords or farmers, are ill prepared to
relinquish the hope of high price. Of these per-
sons, some may still cling to the imagined effect
of a protecting duty, others, with more plausibi-
lity, may build their expectations on the progres-
sive increase of population and on the contingency
L
146 Situation and Prospects
of a deficient harvest. It is of consequence, there-
fore, to enter at some length into a consideration
of these arguments, and to attempt to bring into
the form of an estimate, results, which, at present,
are vague and undefined.
Effect of increasing Population on the Price of
Corn. — The returns in the present age have shown
a rapidity of increase in our population which we
had, for many years, difficulty in considering cor-
rect, but which bids fair to be progressive, owing,
as it apparently is, to causes of a permanent na-
ture ; to an improvement in the condition of the
lower orders, in diet, clothing, and lodging, as
well as to the preservation of the lives of children
by vaccination. But those who found on this an
expectation of relief to our agriculturists, overlook
two very material points ; first, that the producers
of corn increase their numbers in nearly the same
proportion as the consumers ; and next, that the
productive powers of our better soils, far from
having reached their terminus, appear to admit
of an increase almost as great as that of the labour
bestowed on them. In support of this apparently
bold assertion, we refer, as well to the already
quoted arguments of a practical agriculturist, (Mr.
Becher,) as to our experience, as a nation, during
the last eight years. No period was more calcu-
lated to suggest the inference of a limitation of the
productive powers of our soil than the twenty years
preceding 1814, yet this opinion (see the preceding
section, page 136,) has been completely disproved
by the result of our agriculture since the peace.
If we take a wider range than the experience of
the present age, and refer to the history of this
and other countries, we find France as capable at
of our Agriculturists. 147
present of maintaining a population of 30,000,000,
as of supporting 20,000,000 in the beginning of
the 18th century, or 15,000,000 in the beginning
of the 17th. France may be termed an example
altogether in point, manual labour forming the
basis of her agriculture, to the exclusion, in a
great degree, of machinery. England furnishes a
case apparently stronger, the increase of our po-
pulation, during the last century, having been
considerably more rapid, and our soil being still
equal to their subsistence : but we forbear dwelling
on this because it may be argued that the pro-
ductive power of our agriculture has, particularly
in the present age, been so materially promoted
by means distinct from increase of population, we
mean machinery, and other aids arising from the
command of capital. We cannot, however, but
remark, that the next generation will, in all pro-
bability, raise a supply of subsistence as far beyond
ours, as ours is beyond that of the last age, and
may, on comparing the two periods, feel no little
surprise at the negative predictions of several of
our political economists. Without contesting their
principles in the abstract, we must add that
nothing is more likely to mislead than the assertions
of those who assign limits to the extension of the
productive powers of our soil, imperfectly ac-
quainted as they are with its capabilities, and still
more unable to foresee the successive improvements
that may, and in all probability will, be made in
husbandry. How greatly does our prospect of sup-
ply exceed their anticipation : how large, for in-
stance, would be the addition to the produce of
the West of England, and of Ireland, were these
countries merely to adopt the improved plan now
L 2
14S Situation and Prospects
generally followed in our eastern and northern
counties. (See Appendix).
Our next argument, similar in its object, is
somewhat different in its nature. There exists a
perpetual tendency to removal from country to
town, and, on comparing our population lists at
different periods, we find the inhabitants of towns,
in other words, the consumers of corn, augment
their numbers more rapidly than the producers.
We must be cautious, however, of drawing a con-
clusion as to rise of price from this fact ; it merely
marks the natural progress of society in an im-
proving country ; a progress easily traced in our
history for more than two centuries, the agricul-
turists of England, who now form only 33 per
cent, of our population, having formed 50 per cent,
of it in the reigns of Elizabeth and James I. Still
the supply of produce has continued equal to our
increased numbers, and the cause is obvious, the
use of machinery, and the adoption of various im-
provements, enabling the same number of hands to
raise a much larger quantity of subsistence.
Is no rise of prices then to be expected from
the increase of our population ? It certainly may
be expected under circumstances which give a new
or different employment to a portion of our num-
bers— such as appear to have prevailed on the
extension of our cotton manufactures after 1780,
and such as evidently characterise the present
emigration to Upper Canada, and the Western
States of America, the larger proportion of the
emigrants being agriculturists. To this we add,
that the increase of our numbers has in it some-
thing encouraging and cheering : it assures, in a
great measure, the continuance of tillage on our
inferior soils : and taken in a more general view,
of our Agriculturists. H9
it keeps alive the expectation of national improve-
ment so fully described by Mr. Gray, and which
shall be noticed at greater length when we come
to treat of the subject of population.
Effects of a bad Season on the Price of Corn. —
The rise in our corn market, produced by a bad
or even an indifferent season in time of war is very
considerable, our supply from abroad being li-
mited by causes which have not yet been clearly
explained. The public, particularly the untra-
velled part of the public, are hardly aware of the
similarity of temperature prevailing throughout
what may be called the corn-country of Europe,
we mean Great Britain, Ireland, the north pf
France, the Netherlands, Denmark, the north-west
of Germany, and, in some measure, Poland, and
the north-east of Germany. All this tract is situ-
ated between the 45th and 55th degrees of latitude,
and subject, in a considerable degree, to the pre-
valence of similar winds. Neither the superabund-
ance of rain which we experience in one summer,
or its deficiency in another, are by any means con-
fined to Britain and Ireland ; while in winter, both
the intensity and duration of frost are always
greater on the Continent. Exceptions certainly
exist in particular tracts, but in support of our
general argument, we have merely to recall to
those of our readers who are of an age to recollect
the early part of the war, or who have attended
to registers of temperature, the more remarkable
seasons of the present age : thus, in 1?94, the
spring was prematurely warm on the Continent as
in England: there, as with us, the summer pf
1798 was dry, and that of 1799 wet : again, in
1811 the harvest was deficient throughout the
i, 3
loO Situation and Prospects
north-west of Europe generally, from one and the
same cause, blight; while that of 1816 was still
more generally deficient from rain and want of
warmth. In regard to a more remote period, we
mean the 17th and 18th centuries generally, if the
temperature has not been so accurately noted, we
find, from the coincidence in prices, that it is
highly probable that there prevailed a great simi-
larity in the weather of the Continent : thus, in
France the latter years of the 17th century ; the
seasons of 1708 and 1709 ; as well as several of
the seasons between 17&4 and 1773, were as un-
propitious and attended with as great an advance
of price as in England.
Another observation as yet little attended to,
but which has found a place in the Agricultural
Report of 1821, is, that an indifferent season is
not always followed by a favourable one, .but that
two, and even more than two deficiencies of crop
occur sometimes in succession. Such was the case
in the latter years of Elizabeth, in the reign of
William III., and in our own time, in 1799 and
1800: in all these cases the consequences were very
serious, leading to a distressing rise of price, and
showing of how great importance it is to make the
plenty of one year conduce to the relief of another.
But while in war* the effect of a bad or indif-
ferent season is thus severe, its pressure is greatly
alleviated by the cheap freight and open commu-
nication of a state of peace. On referring to the
record of our prices during a century and a half
prior to 1793, we find that the effect of an un-
favourable season was to carry wheat from 4>0s. to5Qs-
or 55s.9 rarely to 60s. Now 55s. or 60s. are nearly
proportioned to 70s. at the present value of money,
and the latter would probably be the currency of
of our Agriculturists. 151
our market in the event of a partial deficiency like
that of 1795. 1804. 1809: to carry our peace
prices higher would require a failure as general as
that of 1816, or two partial deficiencies in suc-
cession as in 1799 and 1800. To those who think
otherwise, we submit two considerations ; first,
that the increase of our numbers does not much
increase the difficulty of supplying our consump-
tion at home ; and next, that the range of foreign
territory from which our corn imports are or
may be derived is much wider than during last
century.
»
Add to this, that a continuance of peace tends in
many ways to an equalization of price between dif-
ferent countries. The obstacles to emigration are
then removed : the tempting profit attendant on
government contracts and other war speculations
no longer detain at home either the individual or his
capital : the charges of production are calculated
closely, and a decided preference given to the
country where those charges are most moderate.
Another, and a still more substantial cause of the
same nature is the increased command of capital
in peace, the augmented means of buying up the
superabundance of one year as a supply for the
demands of the next. Among other structures of
recent date in the vicinity of the Thames, are
warehouses in which corn maybe preserved during
six or seven years without injury: the expence,
which in the case of wheat has as yet been 7s. a
quarter, including interest of the purchase-money,
would be materially lessened in purchases made in
a market so low as that of 1821, and the present
year. (See Appendix.)
Situation and Prospects
•Effect of the Market Price of Corn on the Cost of
its Production. — If the influence of the seasons has
not yet been duly appreciated, much less is that
the case in regard to another cause of rise and fall
which we admit to be somewhat complicated in its
nature, and tardy in its operation ; we mean the
re-action of the market price of corn on the cost of
its production. Our object will be best understood
by an analysis of the charges of cultivation, as ex-
hibited in the subjoined table.
Expence of cultivating 100 acres of Arable Land in England,
at three distinct periods, calculated on an average of the re-
turns made to circular letters from the Board of Agriculture
to farmers in different parts of the kingdom.
1790.
1803.
1313.
£ s. d.
£ s. d.
£ s. d.
Kent
88 6 3£
121 2 7i
161 12 7J
Tithe - - -
20 14 If
26 8 0£
38 17 H
Rates -
17 13 10
31 7 7J
38 19 2J
Wear and tear
15 13 5J
22 11 10-S;
31 2 10£
Labour - - -
85 5 4-J
118 0 4
161 12 11J
Seed -
46 4 lOJ
49 2 7
98 17 10
Manure
4-830
68 6 2
37 7 Qk
Team -
67 4 10
80 8 Qi
134 19 8|
Interest -
22 11 11J
30 3- 8J
50 5 6
Taxes -
—
—
18 1 4
Total -
411 15 11-J
547 10 11|
771 16 4i
NOTE. The article manure is underrated in the last column ;
were it fully stated, the aggregate of 1813 would have ex-
ceeded .£800.
This document presents materials for reasoning
of equal importance to the agriculturist and politi-
cal economist, exhibiting all the constituent parts
of the cost of corn, and enabling us to explain
both the high prices of a state of war, and the fall
attendant on peace. To begin with the rise
of our Agriculturists. 153
in a state of war, its effects are first felt in the
price of labour, the interest of money, and the
direct taxes : an enhancement of these is soon
followed by enhancement in the important articles
of team and manure: an increase in the price of
seed is necessarily identified with a rise of corn :
an increase of tithe, as expressed in money, is a
consequence almost equally direct ; while an ad-
vance of poor-rate has, ever since the days of
Queen Elizabeth, followed, at no distant date, an
augmented price of bread.
Such was the progress of farming charges during
the late wars; the early part of the period was with
our farmers a season of complaint, and with the
exception of tenants on lease, the partial rise in
price, accompanied as it was by high charges, wa>s
accounted a disadvantage to agriculturists. After
1804, their situation improved, but it was not till
1809 that the advantage of war to the farmer be-
came great and general.
Next, as to the reverse of the picture, the un-
weaving of that web which owed its texture to a
double war and a depreciated currency. Wages,
interest of money, the cost of horses, and, in some
degree, direct taxes, have all undergone reduction
since the peace, in particular since 1820: a fall in
the price of seed is a matter of course, while a re-
duced charge in the bills of tradesmen, arid a
diminution of tithe, are necessary though less
direct results of a decline in the corn market. The
remaining charges are rent and poor-rate, both very
difficult of reduction, landlords finding that the
diminution of their expenditure is not equal to the
fall of corn, while in the case of the poor a de-
crease in employment retards that reduction of
parochial charge which would otherwise follow the
Situation and Prospects
cheapness of the necessaries of life. These, how-
ever, are only postponements of an unavoidable
result : landlords must resign in peace the mono-
poly attendant on war, while to our labouring
classes the extension of manufactures consequent
on the fall of provisions, opens a prospect of re-
lief, not speedy, perhaps, but eventually certain.
What then ought to be our inference from
the preceding reasoning? That farming charges
necessarily rise with the market-price of corn, and
as necessarily become reduced by its decline.
From this it follows that as the reduction of charge
is as yet by no means proportioned to the fall of
price, we are justified in anticipating that it will
continue and afford considerable relief to the
farmers, even should prices experience no rise.
This will be best understood by a reference to the
answers of the witnesses who were questioned by
the Agricultural Committee of 1821, about the
cost of raising a quarter of wheat. The 55s. or
605. declared by them, (Evidence, pp. 37, 55, 72.)
to be indispensable to meet the charges exclusive of
rent, are found to supply a fund for rent also, if
we suppose a general diminution of twenty -five per
per cent, on the cost of production. Several of the
witnesses had evidently an abatement of this nature
in view : one of them, a landsurveyor, declared,
(p. 191.) that a price of 645., with a proportional
reduction of charges, would afford a fair rent, while
another witness, a farmer residing in Suffolk, ad-
verted (p. 86.) to the remarkable fact that 2,000/.
forms as efficient a capital at present as 3,0001. in
1817, and considered that in the event of an abate-
ment of one-fourth of rent, poor-rate, labour, tithe
and taxes, 605. a quarter would afford a fair profit in
his county : while the answer of a third witness,
of our Agriculturists. 155
(p. 335.) points to a much lower price as sufficient
in a quarter (East Lothian) where labour is some-
what cheaper, and tithe happily unknown.
How far do these conclusions appear to be
familiar to the majority of those who have written
or given evidence on the state of our agriculture ?
Landsurveyors, accustomed to arithmetical calcu-
lation, are aware of these truths in a general sense;
but the majority of them, like the majority of our
limners, having known none but a state of war,
have great difficulty in considering as permanent
the low prices and low charges of peace. The
Agricultural Report of 18^1, seems to have been
composed under a conviction similar to that which
we have expressed in the preceding paragraphs,
but unfortunately it nowhere exhibits a clear and
pointed statement of the connexion between the
price of corn and the cost of raising it.
Are low Prices likely to continue ?
We are now to follow up the arguments on the very
interesting question of a rise or fall in the market
price of corn. Those in favour of a rise are —
1st. The expence of bringing into culture new
soils of inferior quality to meet the wants of our
increasing numbers. This, the chief argument of
theoretical writers, is already in a great measure
answered by the result of the last eight years ; by
the evidence that the largest additional produce is
obtained from soils already under tillage ; and that
the grand means of increase consist in the appli-
cation of additional labour. Our inclosure bills
in the six years previous to 1815 averaged 115
annually ; in the six following years, during which
our produce has increased so largely, they ave-
raged only 48 j a decisive proof that a very small
156 Situation and Prospects
proportion of that increase was derived from new
soils.
2d. The expence of keeping inferior soils under
cultivation, and the necessity of abandoning them
if low prices continue. This consideration carries
much more weight, and might produce a kind of
revolution in prices were it not the case that the
charges of cultivating land tend so directly to
decrease with the price of corn. No inference
can be drawn from the present situation of our
agriculturists who labour under all the evils of
transition and disproportion ; subject at once to
heavy charges and low prices. At a time when
we are told from so many quarters of over-crop-
ping, of decay of farming stock, and of multiplied
bankruptcies, we must necessarily take for granted
that the plough will, to some extent, at least, be
withdrawn from the inferior soils. In the parts
of Scotland where tillage was pushed farthest, this
painful alternative is unavoidable : in England, at
least in various parts of England, the case is some-
what different : tillage was not so often carried to
an extreme, and the solicitude of the landlords
(Evidence, p. 43.) to prevent the degradation of
their estates by paying for lime and other requi-
sites to the maintenance of good husbandry, will
operate to lessen this and other evils. Add to
this the remarkable fact, that after all the exten-
sion given to our tillage in the present age, the
proportion of ground under the plough and spade
is (Napier's Supplement to the Encyclopaedia,
head of France, p. 373.) considerably smaller in
England than in France. Add also another fact
hardly less important, that the practice of drilling
corn, so lately introduced, is particularly suitable
to second-rate soils.
of our Agriculturist*. 157
But supposing that the tillage of inferior soils were
is relinquished to a considerable extent in England
as in Scotland, it does not necessarily follow that
the amount of our produce would decrease : our
labour must be employed somehow, and would be
transferred to the richer soils. A diminution of
production is altogether contrary to the disposition
of our countrymen : an increase of quantity, even
should the price be lower, is more in correspond-
ence with their active and enterprizing habits.
No decrease of our agricultural produce took
place during the long stagnation of last century ;
during the fifty years that elapsed between 1713
and 1763. And if we advert to a parallel case in
the present age, that of our West India Sugar
planters, we shall find that during a number of
years, (1802. 1805, 6, 7,) their produce as little
paid the expence of raising it, as corn does at
present. A number of estates were abandoned ; in
others, the cultivation was reduced ; but this was
so effectually balanced by the increased produc-
tiveness of the richer soils, that very little if
any diminution took place in the total quantity
raised.
3d. A protecting Duty on Foreign Corn. — The
efficacy or non-efficacy of such a measure is, in a
great degree, matter of opinion. Without as-
suming a decisive tone on either side, we shall
have occasion to show presently that a high duty
would by no means cause a permanent rise in our
corn market, and that the only safe course is to
regard the last thirty years as a period without
example, peculiar in its circumstances, and alto-
gether different from our present situation. We
ought, in the next place, to carryback our view to
the period preceding 1793, and ascertain how far
158 Situation and Prospects
the increase of the charge of raising corn arising
from taxes or otherwise, exceed the reduction of
charge attendant on the improvements that have
found their way into general use. In that pro-
portion only will it be practicable to maintain an
increase of price : any attempt to carry it higher
would be defeated by the extension of our home
growth. Agriculture, like trade, has its projectors,
men ready to transfer to it capital from other
pursuits, and who would find, particularly in Ire-
land, many rich tracts open to their speculations,
now that there is so little inducement to keep
them in pasture. The only method, therefore, of
giving our established farmer a fair chance, is
to be very sparing of stimulants ; the effect of
which is unnatural, temporary, and eventually per-
nicious.
4th. Contingency of a bad Season. — On this head
we have already attempted a calculation, showing
that in former periods of peace the extent of rise
varied from 105. to 20s. on the quarter of wheat,
according to the degree of failure in the harvest.
Under present circumstances, this limited advance
is much more likely to characterise our makets than
the greater fluctuation that took place in the late
wars.
That our prices of wheat are not likely to ex-
ceed 60^., at least for any length of time, is con-
firmed by some arguments of a more consolatory
nature j, viz.
The increase of our growth by the diffusion of
the improved Husbandry. — Under this head we
are disposed to class the more general introduction
of drilling; the farther consolidation of small
farms ; and the more frequent adoption of leases
of our Agriculturists. 1/5Q
when the changes in our money system shall have
reached their termination. For her pasturage
England is deservedly celebrated, but her tillage
is only partially good. In no branch of our
national industry has improving example been as
yet less generally followed : in none has it a wider
field to occupy.
The reduced Interest of Money. — The fall of
interest on public securities since the peace, is
about one per cent., and the prospect is in favour
of some farther decrease, or rather, that the re-
duction, which is at present partial, will become
general, and be communicated to private as well
as public securities. At present, no line of bu-
siness offers a tempting return ; nor is any likely
to withdraw money investments from agriculture
in which, besides, from the reduced price of all
farming stock, the appropriation of WOOL (Evi-
dence, Agricultural Committee, p. 86.) is likely
soon to go, as far as that of 20001. in the time
of high prices.
Such are the principal arguments against any
material rise in our corn market ; and if their
conjunct effect be merely to give us the supply of
a three weeks' consumption above the average of
our crops in war, the result would be a confirm-
ation of the reduced prices, so nearly did our
growth approach even in former years to our con-
sumption.
Contingency of War. — In the event of war all
these anticipations would be overturned : our ca-
pital would no longer be abundant ; our naviga-
tion no longer cheap ; while from no branch of
our industry would labourers be more generally
withdrawn for government service than from agri-
160 Situation and Prospects
culture. At present, however, we leave this for-
midable contingency out of the question : the sys-
tem of France, the only country which immediately
affects our foreign politics, is wholly pacific, nor
is it likely for a long time to be altered by any con-
test that may arise between more remote powers.
A state of war so general as that which followed
the French revolution, is certainly not to be ex-
pected in the life-time of the present generation ;
or, if we admit that it is impracticable to reason
with confidence on so wide a question, there is at
least one point which we may safely take for
granted, viz. that our public men, in the event of
a new appeal to arms, will abstain from two of the
measures, which, more than any others, contri-
buted to raise our corn market, interference with
our currency, and the stoppage of neutral navi-
gation.
" These they will shun through all the dire debate,
And dread those arms whose force they felt so late."
Prospect of Relief to Farmers. — This question,
though apparently identified with that of rise of
price, will be found on examination to rest on very
different grounds, and to present, happily, a less
unfavourable prospect. The reasons for this
opinion are,
1. The interest of all farmers who are not tenants
on lease (Evidence Agricultural Committee, pp.
49, 120,) is to have not a high, but a steady price.
Taken in a permanent view, that price is most
desirable which gives stability to our manufactures,
and prevents our continental rivals from having
too great a superiority over us in the main point
of subsistence.
10
of our Agriculturist*. Ilil
2. Our growth, if it equal, does not, in ordinary
seasons, exceed our consumption ; a situation a
good deal different from that of our agriculturists
after the peace of Utrecht. This circumstance, if
it does not justify the expectation of a rise of price,
affords, when considered along with our increasing
numbers, a kind of guarantee of the past, a secu-
rity against the abandonment, to any great extent,
of the inferior soils.
3. The tendency of agricultural charges to de-
crease with the market-price of corn, and of the
rate of profit in every line to approach to a common
standard.
These considerations confirm the hope that,
eventually, the situation of our agriculturists will
alter, and our tillage be carried on without the
impoverishment of a most useful and respectable
body of men. Still their distress must, under any
circumstances, continue sometime longer, and be
shared by the numerous persons resident in towns
whose livelihood depends on ministering either
to the wants of the farmer or the luxury of the
landlord. Every feeling mind must sympathize
with those industrious classes, whether in town
or country, whose privations, very different from
those of their superiors, too often imply the
renunciation of real comfort. They have, how-
ever, already experienced considerable relief from
reduction in their expenditure ; and a cheering,
though somewhat indirect prospect, is opened to
them from the improved condition of other classes.
All must allow that the sum withdrawn from agri-
cultural income has been far too great in its amount
and too sudden in its deduction ; but it is a con-
solation that it does not, like shipwrecked mer-
chandize, or the expence of an indecisive campaign,
M
162 Situation of our Agriculturists.
form a total and absolute loss to the community r
it is compensated, as far as the evil of sudden
transition admits of compensation, by the cheaper
maintenance of our manufacturers, the prevention
of their emigration, and the ultimate benefit
arising to our agriculturists from their consump-
tion on a more liberal scale.
•;
SECTION III.
A Protecting Du/y.
WE come now to the portion of our subject
which has of late engaged so much attention — the
imposition of such a duty on foreign corn as shall
afford protection to our agriculturists. Our
reasoning on this head will be found materially
different from that of the majority of parliamentary
speakers, the amount of duty appearing to us a
secondary object with the public at large ; while
to our agriculturists, it would, if raised to an un-
due height, be replete with as pernicious conse-
quences as the bounty act of last century. We
proceed, without further preamble, to examine the
following points :
The comparative burdens on agriculture in
France and England.
How far our manufactures receive protection
from our custom duties.
The danger of over-extending our tillage.
The tendency of our commercial legislation to
the abolition of all restrictions.
A populous country not necessarily expensive.
England is, after the Netherlands, the portion of
Europe in which population is both most dense, as
to numbers, and most closely connected by roads
and canals. Compared to us, the inhabitants of
M 2
164 Our Agriculture ;
France, on an equal surface, are in the proportion of
only two to three ; and the degree of separation is
very materially increased by another cause — the
inferiority of the roads and the want of water com-
munication. Germany is still more inferior to Eng-
land, both in numbers and in frequency of inter-
course ; and it is needless to show how much more the
deficiency prevails in the other parts of Europe, in
Spain, Sweden, Poland, Russia. The point at issue
is, to ascertain whether density of population neces-
sarily tends to raise prices, to render a country
dearer than its scantily peopled neighbour ? That
it has in an eminent degree that tendency is
the general impression and report of those among
our travelling countrymen, who found their in-
ferences on a few points most obvious to common
observation, such as the moderate price of labour
on the Continent, and the no less moderate rate of
excise duties ; but they overlook the various con-
siderations on the opposite side of the question,
such as the general inferiority of machinery and
workmanship, the loss of time caused by distance
from towns, and by the necessity of doing personally
that which, in a busy, commercial community, is
prepared by others, and obtained by purchase. In
a subsequent publication, when treating of " Eco-
nomy and retrenchment," we shall take occasion
to explain the distinction between real and apparent
saving, and describe the habitual waste of time in
petty occupations by the inhabitants of provincial
towns on the Continent : at present our wish is
merely to lay down the general rule, that a popu-
lation dense, improved, affluent, does not neces-
sarily render a country more expensive than one
that is poor and thinly inhabited. The difference is
in the mode of living, not in the price of the articles.
Duty on Foreign Corn. 16.5
An increase of population, by leading to an abridg-
ment of labour, and to the transaction of business
en masse, brings with it a dispatch and an extent of
accommodation ; the saving from which is equal,
we believe more than equal, to the enhancement
in provisions attendant on augmented numbers.
It is not in towns of moderate size, however
near each other, but only in the case of an over-
grown capital, such as London or Paris, that the
real and unavoidable difference of expence becomes
considerable. Holland and England are, it is true,
dearer throughout all their provincial towns than
the rest of Europe ; but that is owing partly to
style of living, partly to high taxation, — to the
price paid by either country for the rank which it
has maintained in the scale of European politics.
Were we to subject individual expenditure to an
analysis, and to keep separate the portion of it
which results from these causes, we should find
that our actual prices, the purchase money of com-
modities at market, are not, on the whole, much
greater than in other countries.
These remarks are general, and apply to all
classes of society. We now proceed to the point
more immediately in question, the situation of our
agriculturists.
Comparative burdens on French and British
agriculture.
That the pressure on our agriculture is greater
than on that of our neighbours is sufficiently known,
or rather, sufficiently believed ; for very few per-
sons have been at pains to analyze the burdens on
either. On our side, they consist of tithe, poor-
rate, land-tax, along with a participation in the
M 3
Our Agriculture ;
assessed taxes, the excise duties, and the customs.
To begin with the burdens directly applicable to
agriculture, tithe and poor-rate, we are inclined,
in consequence of the fall of corn, to anticipate
that these charges, as far as paid by the landed in-
terest, will, ere long, be reduced to a sum of about
7,000,000/. for both. The amount of the land-tax,
adding the redeemed to the unredeemed, is about
2,000,0007., making together a sum of somewhat
more than 9,000,000/. To this formidable burden
the French may, with a qualification to be men-
tioned presently, oppose their fonder, or assess-
ment on real property ; which, after the partial
reduction of late years, still forms a charge of 17
or 18 per cent., not on the rent merely, but on the
rent and farmer's profit together. Next come our
house and window tax, which would be feebly
balanced by the portes etfenetres of our southern
neighbours, but which is equalled, or nearly
equalled by that duty, when added to the mobilier,
or tax on the reputed value of furniture. Our
stamps, swelled as they have been during the late
wars, are considered oy our landlords as a very
serious charge, both on leases, sales, or loans ; and a
member of parliament, remarked for his acquaint-
ance with such subjects, * went lately the length of
asserting that this charge was the most heavily felt
of any by our agriculturists. Heavy, however, as
it is, even after the modification lately granted, its
pressure is equalled, in respect to sales at least, by
the French enregistrement, a duty no less than
5 per cent, on the purchase money, which, added
to the other departments of the stamps, produces
#n amount of 5,000,000/., a surprising sum to
* Mr. Frankland Lewis,
Duty on Foreign Corn. 167
collect from a country which was never remarkable
for its wealth.
So far we may be said to have preserved equality
in our comparisons: we now come to points in
which there necessarily prevails a difference,
though less_ great than is commonly imagined.
Thus, in regard to the charges incurred in the
course of cultivation, viz. seed, manure, wear and
tear, working cattle, — the difference, very great
during the war, has lost, or is now losing, much
of its amount. The cost, as expressed in money,
is still, we admit, smaller in France ; but in the
case of implements, and, in some measure, in that
of working cattle, the difference means little more
than inferiority of quality ; an inferiority not unlike
that which would be exhibited by a parallel be-
tween our agriculture of the present age and that
of the beginning or middle of the last century.
A similar remark applies to the domestic expences
of a farmer : the difference lies in the style of
living more than in the price of the articles ; for
in two material points, clothing and fuel, the cost
is not higher in England than on the opposite
side of the Channel. The fuel of the rural dis-
tricts of France is generally wood ; sometimes,
though rarely, it consists, as in Ireland, of turf or
peat.
We come next to a highly important part of
agricultural disburse, the price of labour, a point
in which the balance is greatly in favour of France ;
the wages of an able-bodied labourer not exceed-
ing (Chaptal sur 1'Industrie Fran$aise, vol. i.
p. 245.) six shillings a week without victuals, a
rate considerably below any reduction that we
can reasonably expect from the fall in the price of
provisions. This advantage is not lessened, as
1 68 Our Agriculture;
some of our countrymen may imagine, by any
personal inferiority on the part of the French pea-
santry, ,who repair to their work at as early hours,
and continue engaged in it with as much steadi-
ness and activity as our own labourers. Add to
this, that the saving we have mentioned is en-
joyed by the French farmer equally in the case of
domestic servants, whose diet is plain and whose
habits are sober. In what, then, shall we be able
to find on our side of the Channel a counterpoise
to this essential advantage? First, our imple-
ments, particularly those of iron, being much
superior, enable men of the same bodily power to
do more work, or to do it better. Secondly, the
use of machinery, such as threshing-mills or drill-
ing-implements, is almost totally unknown in
France. Thirdly, our farms are of appropriate
size ; while those of our neighbours, limited often
to such petty occupancies as those of our an-
cestors of the 16th and 17th centuries, afford no
field for the beneficial employment of either capital
or machinery. Lastly, our farmers, in borrowing
money, pay an interest less by one, or one and a
half per cent., than is required in France, six or
seven per cent, being a very common rate in that
country.
A long list of the agricultural disbursements of
the two countries is thus made to balance, and the
remainder of the parallel is brought within a com-
paratively narrow compass. It may, in fact, be
considered as reduced to two points : on the one
hand, the contingency of benefit to the English
agriculturist from the corn-laws ; on the other,
the heavier excise and customs to which he is sub-
jected. A protecting duty is not unknown in
France ; and, under the provisions of the late
Duty on Foreign Corn. 169
acts of 1819 and 1821, the price of 4<6s. or 475.
for the Winchester quarter of wheat is apparently
secured to the farmer ; but, in a country which
usually grows its full consumption, regulations
affecting import must be of rare and temporary
operation. We pass over, therefore, this frail
support, and proceed to the permanent and sub-
stantial points of difference in the condition of the
British and French farmer. These will be found
in the magnitude of our taxes on consumption.
Our custom duties, being chiefly on luxuries, do
not very greatly affect our agriculturists; but,
among our excise duties, the tax on leather, which,
after the late reduction, still forms a burden of
nearly 150,0007. on our peasantry, is unknown in
France ; while our duties on malt, beer, and corn-
spirits, amounting, after the late abatement, to
the surprising sum of 9,000,000/. sterling, are
feebly met by the French taxes on wine, cider,
and malt. In years of over-stock of corn, like the
present, the whole of the very large sum we have
mentioned may be said to form a charge on our
agriculturists, exactly as the tax on sugar, in a
season of over-growth, falls on the West India
planter. These, however, are happily extreme
cases ; and we shall at present suppose them out of
the question, calculating that of such duties no
more is usually borne by our agriculture than the
portion paid for the consumption of the farmers
and peasantry. Even then, it will exhibit a sum
of 3 or 4,000,000/. sterling ; a sum which, added
to the 1,000,000/. by which our tithe and poor-rate
exceed the French Jbndery may be said to represent
the greater share of public burdens borne by the
British agriculturist. These form a permanent
disadvantage on his side, except in as far as they
i?() Our Agriculture;
receive a counterpoise from the operation of our
corn-laws.
What then, it may be asked, is at present the
respective situation of the agriculturists in the
two kingdoms ? Rents, which in this country were
doubled, and, in many cases, more than doubled
during the war, experienced in France a com-
paratively slender increase ; and it may, without
fear of contradiction, be asserted, that in 1814, the
rental of England, which, distinct from Ireland and
Scotland, amounted (see p. 138.) to 40,000,000/.,
approached to that of a country of nearly three
times its population. The rental of France, how-
ever, was much more secure : the price of corn
in that country is little lower in peace than in
war ; and the travellers who passed over her de-
partments, did not, until the present year, hear
much of those reductions of rent and wages,
which among us have been going on on so large
a scale since the peace. The price accounted
sufficient to enable their agriculturists to live
and pay taxes, is about 4<5s. the Winchester quar-
ter, in peace.
We shall now suspend our continental parallel,
and bestow a few paragraphs on one of a different
kind; on the comparative situation of our agricul-
turists and manufacturers.
Are our manufacturers actually benefited by pro-
tecting duties ? That such is the case, and in a
very considerable degree too, is the opinion of
the majority of our agriculturists. It is true, how-
ever, only in a slight degree, as will soon be ap-
parent from the following facts. The total value
of British manufacture annually prepared, whether
11
Duty on Foreign ( 'urn. 1 '/ 1
ibr home consumption or export, was computed
in 1812, by Mr. Colquhoun, at 1^3,000,0007.
Since then their quantity has greatly increased ;
but as their price has experienced a great fall, we
shall probably deviate little from the truth, in as-
suming that sum as a fair representation of their
present aggregate value. But of this very large
amount, the half, or more than the half, consists
of the three great articles of cotton, woollens, and
hardware ; none of which receive protection from
custom-duties, our manufacturers being enabled,
by inherent advantages, to repel foreign compe-
tion, and even to meet our rivals in their own
markets. Thus our cottons are cheaper than those
of France, Germany, or the Netherlands, from
various causes ; the import of the raw material is
a little less expensive, our machinery is superior,
our supply of fuel more abundant, and the capital
employed subject to a less heavy charge of in-
terest. In hardware, we possess a similar advan-
tage in point of fuel and capital, with farther aids
in the carriage of the ore by water, and in a subdi-
vision of labour, to which the Continent in no de-
gree approaches. If in woollens our superiority
be less decisive, and if the quality of French cloth
be more substantial, the fact is, that from our
power of giving long credit to Americans and
others, we, as yet, retain possession of most of the
foreign markets.
We have thus narrowed, very considerably, the
extent of manufacture supposed to be benefited
by protecting duties. We might go a step farther,
and enumerate various articles (such as refined
sugar or pottery ware), in which protection is out
of the question ; while the remainder that are more
or less protected by our custom-duties do not, per-
172 Our Agriculture,
haps, surpass the value of the agricultural produce
to which favour is extended from the same quarter ;
our duties on foreign timber, flax, hemp, tallow,
seeds, madder, butter, cheese, and rice, all
operating, or being intended to operate, in favour
of our agriculturists.
The account is thus balanced, with the excep-
tion of land-tax, tithe, and poor-rate ; which,
forming an extra burden on agriculture, and one of
great amount, parliament have endeavoured to
countervail by our corn-laws : at one time by a
bounty on export, at another by a restriction on
import.
What, it may be asked, was the real motive on
the part of government for these multiform regu-
lations, this long list of duties, drawbacks, boun-
ties ? Not to confer on any of the parties, whether
agriculturist or manufacturer, an absolute advan-
tage, but to reconcile them to the taxes imposed
on the respective articles of their produce, and to
prevent foreigners from underselling them in the
home market. Under this impression, and con-
sidering the amount of tithe and poor-rate at
present a dead loss to the landed interest, we
can hardly coincide with the argument in the Agri-
cultural Report of 1821 (pp. 23, 24.), that our
landholders have not a right to custom-house pro-
tection. Our hesitation would arise from a very
different cause : first, from a doubt of the effi-
cacy of a protecting duty ; and, next, from a
dread that the expectation vulgarly excited by it
would, as in the case of the bounty, lead to ex-
cess of home growth.
This shall be a subject of subsequent discussion :
at present we shall conclude by a reference to our
taxes on consumption. Of these, it does not
Duty on Foreign Corn. 173
appear that the agriculturist has greater reason to
complain than his mercantile or manufacturing
neighbour. Those most severely felt are on
leather, soap, candles, and glass; also those on
tea and sugar, since they have been raised to their
present immoderate rate. But these, as well as
the farther imposts that form the long list of our
excise duties, are paid in common by residents in
towns ; and if the pressure of the malt-tax be more
heavily felt in the country, a kind of balance is
afforded by the untaxed substitutes for groceries,
which the country supplies to its inhabitants.
Danger of an over-extension of our Tillage.
This danger, which some years ago would have
been treated as chimerical, we now find to have
as strong a claim to attention and to precautionary
measures, as the hazard of an over-extension of
manufacture. Of the truth of this our readers
will be satisfied on referring to our arguments in
the preceding section ; and, above all, to the fact,
that with so small a number of inclosure acts
(forty-eight annually), we have found the means
of meeting every year, since the peace, the de-
mand of more than 100,000 additional consumers.
To what can this be mainly owing, except to the
diffusion of improved methods, to the application
of additional labour and capital to soils already
under tillage ? And who, in this age of agricul-
tural discovery, in this season of abundant supply,
both as to labour and capital, can with confidence
predict either the limit or the result of such appli-
cation ?
In prosecuting this inquiry, our readers may,
we believe, leave at once out of consideration all
arguments against the increase of our growth,
174 Our Agriculture;
founded on the expence of reclaiming poor soils ;
not that such expence is over-rated by Mr. Ri-
cardo and others, but because it is unnecessary, a
larger produce being obtained by bestowing addi-
tional culture on the better soils. If in regard to
England and Scotland, our conclusions are called
in question, and it is maintained that recourse to
inferior soils must ere long follow an increase of
our numbers, they can hardly be contested in re-
spect to the sister island, where such extensive
tracts of fertile land await the application of a
better system. Under such circumstances, what
security have our established farmers against the
agricultural speculator except in a measure at
first apparently disadvantageous to them, we mean
the removal of a tempting contingency and an
assurance, as far as can be conveyed by legislative
regulation, that the prospects of agriculture are
not of a nature to justify the transfer of capital
from other lines of business ? The true interest of
both farmer and landlord is to beware of extending
tillage, to adapt our growth, as nearly as possible,
to our consumption ; perhaps to keep the former
somewhat below the latter, submitting, as after
1773, to a small but regular import. It is that
course alone which can give assurance of a steady
demand, of a generally brisk market.
The Corn committee of 1813, actuated by a
strange mixture of ignorance and selfishness, re-
commended the prohibition of import, except when
our own wheat should be at or above 105,9. the
quarter. Now if with the comparatively small en-
couragement held out by 80s. our tillage has so
much increased, how much greater would have been
the augmentation had the extravagant proposition
of the committee been adopted by parliament ?
Duty on Foreign Corn.
What an extent of inferior soil would have
brought under the plough in the course of two
years! What an overstock on the market before
discovering the inefficiency of a corn-law to keep
up prices ! — an overstock admitting not of remedy,
like excess of import, by shutting our harbours,
but remaining in force for years, perhaps requiring
the ruinous alternative of abandoning land under
tillage.
Among the various expedients suggested by the
distress of last year, was that of comprehending in
the returns, which form our weekly averages, such
Irish wheat as is sold in England : the result of
this, in consequence of the inferiority of Irish
wheat, is to render a return of 60s. equivalent as
a representative of price, to 6%s. or 63s. on the
former plan of taking the averages. Under pre-
sent circumstances this has no practical effect ;
but were our market to rise, we should soon see
that all expedients of this nature tended to stimu-
late production to a hazardous extent.
After these arguments we may venture to hazard
an opinion, which would otherwise have appeared
not a little paradoxical, viz. that in peace the
rate of duty on foreign corn is of importance to
the public, less as consumers of provisions, than
from their general interest in the welfare and
good government of the community. The effect
of a high duty would be temporary : extremes
soon produce their own cure, and consumers might
safely trust to the extension of home culture.
The evil, however, would not stop there : the
agriculturist would be sunk in distress, and the
merchants and manufacturers would consequently
be subjected to an extra share of the public bur-
dens. Hence the importance of maturely weigh-
Our Agriculture;
ing, not the demands of a particular class, but the
interest of the public in the most comprehensive
sense.
Farther, the misfortune of the present day is
less the reduction of income than the evil of tran-
sition ; and the public now expect such measures
as shall set at rest this ruinous fluctuation. If our
present desideratum be a general reduction of
wages, salaries, and other money payments, not
yet brought to their level, nothing, it is clear, can
so effectually promote that object as a moderate
rate of duty on foreign corn ; an assurance, as far
as assurance can be given, of our market being
kept at a steady price ! How satisfactory would
it be to merchants, manufacturers, annuitants, and,
above all, to farmers, to know on what probable
price of corn they are to found their future calcu-
lations, to fix wages and salaries, to regulate their
domestic expenditure.
In what manner, it may be asked, can a reference
to the past be made instrumental in guiding us to
a knowledge of the rate, calculated to form a fit
protecting duty ? By fixing our attention on the
cost of raising wheat, not in a period such as that
of the last thirty years, a period as anomalous in
productive industry as in politics ; but at a time
when Europe enjoyed that tranquillity which she
has happily now in prospect. Comparing the
present and the former charges on our tillage,
we shall find that labour, team, manure, may
and ought soon to be brought back to a rate not
much exceeding that of 1792 : that tithe is neces-
sarily proportioned to the market price of corn,
and must follow its fall ; while poor-rate, though
more difficult of reduction, ought to yield to the
substantial advantage of cheap provisions, and
Duty on Foreign Corn. 177
the opportunity of work afforded by our manu-
factures.
Tendency of our Legislation to ultimate Freedom of
Trade.
We shall now suspend, for a few moments, the
consideration of temporizing measures, of the ex-
pedients devised to meet the pressure of the day,
and carry our speculations to a more distant ob-
ject ; to the probable situation of our agriculturists
and manufacturers of the next generation. In their
time, our financial circumstances bid fair to be more
favourable ; and parliament, relieved from imme-
diate urgency, may legislate with no other view
than that of the permanent advantage of the coun-
try. It was long an opinion among our countrymen,
that the landed and commercial bodies had opposite
interests ; that a tax imposed on the land was of
no particular detriment to trade; and that the
gains of our merchants were of little consequence
to agriculture. In the present age a more ample
experience, a community of suffering on the
part of these great portions of the community,
have taught them a more liberal doctrine. It is
no where more emphatically urged than in the
passage (p. 20.) of the Agricultural Report of
1821, where the intimate connexion, the strict
depen dance of agriculture and trade on each other,
are proved by the evidence of the last hundred
years of our history. Assuming, therefore, that such
will be the ultimate basis of our legislative mea-
sures, we are naturally led to take a view of our
productive industry somewhat more comprehensive
than in the preceding paragraphs, and to inquire
on what particular advantages our national prospe-
rity has been and is likely to be established.
N
178 Our Agriculture.
Every country possesses its physical character-
istics, its peculiar and distinctive aptitudes. If,
adverting to the early history of civilization, we
cast our eyes over a map of Greece, and observe
how much intercourse was there facilitated by
maritime inlets, and by insular positions in a sea
of easy navigation, we shall find it easy to account
for the early improvement of that country, without
ascribing any great share of influence to fortunate
accidents, to the exploits of warriors, or the coun-
sels of legislators. If we take a wider range, and
inquire by what features the physical structure of
Europe is discriminated from that of Asia or Africa,
we shall find its advantages consist partly in a clim-
ate exempt from extremes, but more in the ample
means of navigation afforded by the Mediterranean
and the Baltic. Lastly, if, drawing nearer home, we
endeavour to ascertain how it happened that Flan-
ders was flourishing amidst the barbarism of the
thirteenth and fourteenth centuries, we shall trace
it principally to two causes ; fertility of soil and
ease of water communication. The latter, joined
to the advantage of a free government, explains
the still more remarkable growth of the Dutch
provinces in the seventeenth century.
By what peculiar advantages has England been
distinguished, and enabled to take the lead of
France and Germany, countries equally favoured
in soil and climate ? In a religious and political
sense, our superiority has consisted in the enjoy-
ment of the reformed faith and a representative
government ; in a physical sense, in our extent of
coast, and in the productiveness of our coal mines.
Natural superiority of another kind we can hardly
boast : our pasture is, indeed, richer than that of
continental countries, and we consequently take
the lead in horses, cattle, and, in some degree,
its Origin and Progress. 183
for a provision for the poor, when deprived of
charitable aid from monasteries; and the enhance-
ment, both progressive and rapid, which, as we
have seen in the preceding chapter, took place in
provisions during the Kith century. The former
may perhaps be termed the ostensible, the latter
the real cause. Be this as it may, their conjunct
operation led to various enactments in favour of
the poor, which were definitively consolidated in
the act of 1601, — an act prepared with all the care
and deliberation characteristic of the ministers of
Elizabeth, and which would never have received a
pernicious extension had its executiqn fallen into
proper hands. Its provisions were intended at first
for the relief of merely the aged and infirm, and
led to little beyond the degree of aid afforded at
present to the poor in Scotland or in France; but,
frqm unfitness pn tfye part of annually changed
overseers, and from the remissness always attendant
on the unphecked disposal of public property, the
act was in time construed into an obligation to
find work for the unemployed generally, as well as
to make up to those who had children the dis-
proportion which in dear seasons took place between
the price of bread and the rate of wages.
Our poor-rate became thus a fund, not merely
for charitable purposes, but for the equalization
of wages ; a counterpoise to the fluctuations arising
from inclement seasons, or from any cause pro-
ductive of a rapid fall in the value of money.
This result, certainly well intended, and which at
first sight seems of beneficial operation, is found,
on trial, to be replete with all that irregularity and
abuse which it is so difficult to avoid in any inter-
ference with the natural course of productive
industry. Of this, a striking proof is given not
N 4
184 Our Poor Law System;
only in this country, but in the New England
states, and in the state of New York ; for even in
these, the countries of the world in which the pay
of the labourer is most liberal, the number of
paupers is large. They are, happily, the only
foreign countries in which our example has been
imitated. On the continent of Europe the public
institutions afford protection only against infirmity
and extreme penury : even Holland, so long noted
for its hospitals and charities, has not a poor-rate
on the comprehensive plan of England.
Its Progressive Extension. — Our records of the
distribution of relief to the poor during the seven-
teenth century are very imperfect : its amount,
however, must have been considerable in the first
half of the century, in consequence of the con-
tinued rise of corn during the reign of James I.,
and part of that of Charles I. But during the
thirty years that intervened from 1660 to 1690,
the price of corn was on the decline, and the
country experienced in no great degree either the
visitation of inclement seasons or the burden of
military expenditure. In the reigns of William and
Anne the case was far different; an enhancement of
corn consequent on bad seasons, on war, and in-
terrupted navigation, concurred with the disorder
in our currency to render a state of suffering
general among the lower orders, and to give a
melancholy corroboration to their claims for paro-
chial relief. The number of persons receiving
such aid is said (Clarkson on Pauperism) to have
amounted, towards the close of the seventeenth
century, to as large a portion of our population
as at present, viz. a tenth part of the inhabitants
of England and Wales. The amount of money
Duty on Foreign Corn. 181
long-established assessments, above all, any new
demand on our exchequer, as replete with embar-
rassment.
Several of the late measures of ministers, such
as the virtual renunciation of the Sinking fund,
the extended freedom of navigation, the gradual
transfer of the half pay and pension list into Long
Annuities, evidently proceed on sound calculation.
They might be supposed by the political inquirer
to indicate an adequate estimate of our resources
on the part of our political guides, were they not
accompanied by such indecisive language as that
which has been held by them in regard to the tithe
of Ireland. That language seems to imply that
ministers, though not unable to extend relief to
the sister island, are distrustful of their power to
meet the more extensive demands to which, in
progress of years, the concession might give rise in
England.
From these various considerations, we must be
understood as regarding a state of freedom in our
corn trade as a remote result ; and as confining
ourselves at present to the suggestion, that mea-
sures of a different kind, whether an occasional
prohibition of import or a protecting duty, ought
not to be invested with a character of permanency,
but should be made to bear in their provisions a
reference to that freedom which is likely to be our
definitive policy. We say definitive, because, under
present circumstances, we regard its adoption as less
likely to be the result of any arguments that can
possibly be urged, than of a continuation of low
prices ; which, by reducing the cost of production,
and replacing our tenantry in nearly the same
situation as in 1792, may cause our corn laws to
expire by a natural death.
N 3
Our Pdor Law System ;
CHAP. VI.
Poor-Rate.
THE subject of poor-rate has already engaged
so much attention both in parliamentary investiga-
tions and published works, that we shall avoid all
general discussion, and confine ourselves to what
may be termed plain, practical topics, such as the
comparative amount of money distributed at dif-
ferent dates to the poor, and the degree of pressure
on the contributors. We take up the subject less
as a national question, than as an appendage to
our observations on agriculture : but our summary,
brief as it may be, will, we trust, explain two
points, at present little understood ; — the great
increase of parochial charge during the war, when
labour in general was so liberally paid, and the
very considerable reduction that is now taking
place, notwithstanding the apparently less favour-
able state of our productive industry.
We propose to treat successively of the —
Origin and progress of our poor-law system j
Its degree of pressure considered as a tax 5
Its effect on the condition of the lower orders.
Origin of our Poor Laws. — The origin of the
English poor laws, a system so different from that
of neighbouring countries, is to be traced to two
causes, — the call, at the time of the Reformation,
Duty on Foreign Corn. 179
in the woollen manufacture; but whatever comes
under the description of agricultural advantages,
ought, we believe, to be left out of the question,
and to be considered as balanced by the less va-
riable temperature, the greater warmth of the
Continent. Our farming is, indeed, much more
advanced ; but is not that the result of indirect
causes, of the reaction of our trade and manu-
factures, of the application of capital to tillage
and pasturage, and of our tenantry being thus en-
abled to occupy farms of suitable size, instead of
the insignificant tenures still so common among
our neighbours ?
In what manner, it may be asked, is this reason-
ing applicable to the present discussion, thequestion
of a protecting duty on corn ? Our answer is, that
we should greatly mistake our national prospects
were we to suppose that we have as yet received
all the benefit attainable from our superiority in the
grand points of fuel and navigation ; — on the con-
trary, it may safely be asserted, that we are not yet
in the midst of our career, not half-advanced in the
task of turning these advantages to account.
Continental countries are making a very slow pro-
gress, either in navigating the ocean, in forming
canals, or in working coal mines : in each of these
our superiority still offers an ample basis for the
superstructure of national wealth. It would pro-
bably be such as to enable our manufacturers,
though taxed in regard to provisions, to maintain
a competition with their continental rivals ; but it
is perfectly clear that they never will be able to do
full justice to our national advantages until placed
on a footing of equality in that very essential point.
A reference to our custom-house returns would
soon show how small our export of articles, such as
N 2
180 Our Agriculture.
hardware, glass, and even woollens, is, in compari-
son with what it might be, were equality in the price
of provisions added to our other advantages.
This opens to our view all the advantage that
would arise from a free trade in corn, or from the
reduction of the protecting duty to a lower scale
than has as yet been contemplated, either by minis-
ters or by the most temperate of their opponents.*
In another place (see Appendix) we have appro-
priated a few paragraphs to this topic ; and these,
under present circumstances, are, perhaps, all that
it is advisable to urge in regard to it. The landed
interest are as yet but imperfectly apprised of the
extent of its ultimate advantage to them ; nor can
we expect that their attention will be soon weaned
from the high prices, the great nominal rents of
former years. If our ministers are more deeply
read in the science of national wealth, more fully
convinced of the reaction of the prosperity of
trade and manufacture on agriculture, they have
objections of another kind ; they cannot but re-
gard a fall of prices as a virtual augmentation of
the public debt. They are aware, likewise, of the
evils of transition ; and must, to use the language
of the Agricultural Report, be anxious " to spare
vested interests, and to deal tenderly even with
obstacles to improvement, when long implanted in
our system." To all these difficulties we have to
add, that the exemption of our agriculture from
tithe, and its extra share of poor-rate, would be an
indispensable preliminary to a measure which would
bring our corn market almost as low as that of the
Continent. Now government, however convinced
of the impolicy of these burdens in their present
shape, could hardly fail to consider any change in
* Ricardo on Agriculture, pp. 82, 83.
its Origin and Progress.
189
For the year ending 25th March last,
the returns as yet received exhibit
a diminution, which, joined to a
further reduction in the year now
in progress, appears to justify our
assuming the total of our present
expenditure for the poor, at - - .€6,000,000
NUMBER OF PERSONS RELIEVED.
YEAR
ending Easter,
1813.
Easter, 1814.
March 25th,
1815.
Poor permanently re-
lieved in workhouses
97,223
94,085
88,115
Ditto, ditto, out of work-
houses (without reck-
oning children)
434,441
430,140
406,887
Parishioners relieved oc-
casionally
440,249
429,770
400,971
Total of paupers!
relieved - -j"
971,913
953,995
895,973
Workhouses. — The preceding return exhibits in
a separate line the number of poor living in work-
houses. This plan is, in a manner, peculiar to
England, the public establishments in other coun-
tries being confined to hospitals or houses of cor-
rection. The workhouse plan, originally adopted
above a century ago, received a great extension
from an act passed in 1782, commonly called Gil-
bert's Act, from the name of the member of parlia-
ment by whom it was framed. This act, aiming
to combine the advantages of an assemblage of a
190 Our Poor Law System ;
number of poor on one spot, of a minute division
of labour, and a joint management of disburse, em-
powered all magistrates to consider any large work-
house as a common receptacle for the poor through-
out a diameter of twenty miles. Sound as these
reasons apparently were, the plan has as yet been
by no means successful : proper care has seldom
been taken to separate the inmates of the work-
houses according to their age or their habits ; nor
has the division of employment been at all carried
to the necessary length. Their earnings have con-
sequently been insignificant, and the charge to the
parish amounts, in general, to 97., 10/., or even 127.
per head, while half the sum would suffice, if paid
to the poor at their own habitations. It is thus in
some measure fortunate that the limited extent of
our workhouses hardly admits above 100,000 indi-
viduals.
Scotland and France. — It is a general notion in
England that Scotland has no poor-laws, — a notion
originating in the very satisfactory circumstance of
the lightness of her poor-rate. But there are and
have long been in that country statutes enacting that
certain funds shall be faithfully applied to the relief
of the poor. These funds, however, are levied by a
very easy process: first, from collections made at the
parish church; next, from the interest of money or
rent of land bequeathed by individuals for the use
of the poor ; and lastly, from a moderate assessment
paid in general half by the landlords, the other half
by the rest of the parish. In 1817, a year of scarcity
and distress, the total poor-rate collected in Scot-
land was 11 9,000/., of which nearly 70,0007. pro-
ceeded from charitable collections and donations j
ife Origin and Progress.
187
RETURNS FOR ENGLAND AND WALES.
YEAR
ending Easter,
1813,
Easter, 1814.
25th March,
1815.
£.
£.
£•
Total money received
by poor-rate, and, in
a smaller decree by
ch urch-rate,high way-
rate, county-rate, &c.
in England and Wales
8,651,488
8,392,728
7,460,855
To these sums are to be
added charitable do-
nations, whether aris-
ing from land or
money, managed by
the clergy, church-
wardens, or overseers:
Annual average
238,310
238,S10
238,310
EXPENDITURE.
For the maintenance
and relief of the poor
6,679,658
26,97,331
5,421,168
Law-suits, removal of
paupers,and expences
of overseers or other
officers -
325,107
382,966
324,665
Families of militia-men
and other militia
charges -
246,202
188,676
105,394
Church-rate, county-
rate, highway -rate,
&c.
1,614,871
1,692,990
1,657,627
£
8,865,838
8,511,863
7,508,854
The average of the two years 1815 and 1816 was,
church, county, and highway-rate £1,212,918
Maintenance and relief of the poor, including law*
suits, removal of paupers, and expenceof overseers 5,714,506
In all - - ^6,937,425
188
Our Poor Law System ;
The poor-rate was thus in progress of reduction,
both as to the amount levied, and the numbers of
individuals relieved, when a general re-action took
place, in consequence of the high price of provisions
that followed the bad harvest of 1816.
Relief and
AVERAGE
Maintenance of
Church-rates,
the Poor; also
County-rates,
or
Law Suits, Re-
Highway-rates,
TOTAL.
moval of Paupers
and Militia-
TWO YEARS.
and Expence of
Officers.
charges.
1816 and 1817
£.
6,918,217
£.
1,210,200
£-
8,128,417
1817 and 1818
7,890,148
1,430,292
9,320,440
1818 and 1819
7,531,6.50
1,300,534
8,932,185
1819 and 1820
7,329,594-
1,342,658
8,719,655
Such was the unparalleled amount of our pay-
ments for the poor during an interval when a high
price of corn unfortunately concurred with the
derangement of productive industry arising from
our great national transition. Since 1818 the
amount of this formidable charge has experienced
a progressive, though far from rapid reduction.
In our manufacturing districts the low price of
provisions, and the increase in our exports, have
afforded great relief: in the agricultural, the case
has been reversed from the discouragement of all
farming operations requiring a number of hands,
or attended, in any shape, with considerable ex-
pence.
Total expenditure for the poor of Eng-
land and Wales, in the year ending
25th March, 1821, (exclusive of
county and other rates)
^6,947,660
its Origin and Progress. 185
collected for this purpose has not been put on
record : it is said, somewhat loosely, but without
much appearance of exaggeration*, to have ap-
proached at the period in question to a million
sterling j a burden heavily felt in these days of
limited rental, and productive consequently of
great complaints.
The long peace and reduced price of provisions
which followed the treaty of Utrecht, were both
conducive to the decrease of poor-rate, and, not-
withstanding an increase in our population, we find
that in the middle of the century, viz. in the three
years ending with 1750, its amount did not (Re-
ports on the Poor Laws in 1817 and 1821)
exceed an average of - 700,0007.
After 1760, the charge for the poor participated
in the general charge which took place in the state
of prices, and amounted in that year to 965,000/.,
while at a subsequent date, in 1770,
it was carried to - 1,306,000/. ;
so much did the effect of indifferent seasons and
the enhancement of corn counterbalance the other-
wise favourable circumstances of the period —
the enjoyment of peace, the extension of our
manufactures. Next came the contest with our
colonies, along with the various losses attendant
on interrupted export, and the suspension of un-
dertakings dependent on a low interest of money,
the result of which, in concurrence with other
causes, carried the charge of poor-rate
in 1780 to - - 1,774,000/.
The peace of 1783, though favourable in the
main, was not unaccompanied by the evils of
* Sir F. Eden on the State of the Poor,
186 Our Poor Law System ;
transition. Our productive industry partook at
first of the discouragement excited by the loss
of our colonies ; and though it soon exhibited
symptoms of vigour, and even of prosperity, the
price of bread was kept up by the indifferent har-
vests of 1788 and 1789. When to this we add
the increase of our population, and make allowance
for the progressive introduction of abuse into a
system subject to so little check or controul, we
need not be surprised that in 1790, the sum col-
lected for the poor amounted, when joined to the
minor rates for highways, church, and county
charges, to - 2,567,0007.
Such was the state of our poor-rate at the
beginning of the French Revolution, the time
when we entered on a course of circumstances
productive of a rapid change in the value of money.
Hitherto the augmentation of our rates had been
gradual, a century elapsing before they doubled,
a ratio of increase little greater than that of
our population. But after 1793, the concurrent
effect of war and indifferent seasons rendered the
price of bread so disproportioned to the wages of
country labour, that in 1800 the poor-rate, ex-
clusive of the highway, church, and county-rate,
amounted to - 3,861,0007.
In 1810 to - 5,407,0007.
And in 1812 to - - 6,680,0007.
The peace of 1814 was followed, as is well
known, by a rapid fall in the price of corn, which
continued during two years, and had, notwith-
standing the many new claims for parish relief
arising from want of work, the effect, on the whole,
of a partial reduction of the poor-rate. This is ap-
parent from the subjoined table.
its Origin and Progress. 191
the remainder from assessment. The latter, how-
ever, did not extend over the whole of Scotland,
being levied only in the low country, particularly
in the districts containing manufacturers ; while
the mountainous countries of the north remained,
as they have always been, exempt from assessment.
The paupers in Scotland are in the proportion of
only one in forty r, a proportion which would doubt-
less have been increased, had the high price of
corn, and the attendant operation of the English
poor-laws, continued ; for it is a truth of serious
import, that the distribution of a parish allowance
to manufacturers in England operates as a serious
comparative disadvantage to their humble brethren
in the north. Thus, when in a depressed branch
the wages are equal to only 8s. or 9s. a week, the
allowance of poor-rate to the English manufacturer
may, and generally does, carry his receipt to 10s.
or IQs.j a difference which has had the effect of
inducing a number of the Scottish workmen to for-
sake their homes.
What, it may be asked, have been the causes
of so material a difference in the management of
the poor in Scotland and in England? The two
countries embracing the Reformation in the same
period, and falling under the sway of the same
sovereign soon after the enactment of the poor-
law of 1601, the regulations were originally similar;
but in Scotland their execution was vested, not in
temporary officers, such as churchwardens and
overseers, but in the landholders, clergymen, and
elders or deacons, whose functions were perma-
nent, and whose personal acquaintance with the
poor enabled them to act with discrimination. The
good effects of this plan, evinced as they have been
by the practice of two centuries, induced the
192 Our Poor Law System ;
Committee on the Poor Laws in 1817, to recom-
mend that in England the overseer should be a
permanent officer with a salary, and should act, if
necessary, for several districts ; a practice that has
since been adopted with a beneficial result in a
number of the parishes and townships of England.
In France, before the Revolution, the poor were
supported, as in Spain, Italy, and other Catholic
countries, chiefly by the abbeys, priories, and other
beneficial establishments. The.se sources of income
being absorbed in the sweeping changes of 1790
and 1791, there took place in the legislative as-
sembly a long discussion on the fittest mode of pro-
ceeding for the poor : the result was a decided de-
termination to avoid the English plan, but to provide
at the public charge a fund of about 2,000,0007.
a year, for the relief of the aged and infirm
throughout the whole of France. In the disorders
of succeeding years, great defalcations took place
in regard to this fund; but in the reign of Bona-
parte there were imposed, or rather revived, octrois
or dues on wine, cider, spirits, and other articles
of consumption, paid on their introduction into
towns. The imposition of a tax was in these days
a matter of far greater difficulty in France than in
this country; and the revival of the octrois was for
a time attempted only as a fund for charitable pur-
poses ; but when the public became accustomed to
this mode of contribution, its rate was augmented,
and the proceeds rendered available to a variety of
local purposes.
In addition to the aid arising to the poor from
these dues, collections are made by subscription in
the depth of winter, or on the occurrence of ex-
traordinary distress ; and, finally, in a season of
general hardship, such as the winter that followed
its Origin and Progress. 193
the bad harvest of 1816, occasional issues are made
from the public treasury, on thr application of
mayors or local magistrates. In Paris there are a
number of hospitals : in the large provincial towns
there are, in general, two, one for the sick, the
other for the aged. These institutions, however
are managed with all the laxity and want of method
so common among our southern neighbours : men-
dicity is unrestricted, and prevails in many places
to a reprehensible degree. In fact, the dwellings
of the lower orders throughout France generally,
whether in the country or in the suburbs of a town,
exhibit to an English eye a very bare and denuded
appearance. But to account for this general as-
pect of poverty by the want of parochial aid, would
be as erroneous as to ascribe the comfort of the
lower orders in Holland, to the aid afforded by
charitable contributions. In that country, as in
England, the better lodging and better furniture
of the poor are the result of long-continued com-
mercial activity; of the ample supply of work, of
the habits of care, cleanliness, and order, which, in
the course of time, it imparts to the agricultural
portion of the community.
Poor Rate considered as a Tax. — Our next, and
equally interesting object of inquiry regards the
contributors to the poor-rate, and the comparative
degree of pressure imposed on them at different
periods. And here our readers must be prepared
for our making a large deduction from the increase
of burden indicated by the numerical returns of
poor-rate during the late wars; a deduction justi-
fied on two grounds, — the depreciation of the
money in which it was paid, and the increase in
o
194.
Poor Rate considered as a Tax.
the number of the contributors. In what manner,
it may be asked, do the latter receive an increase ?
Of those who pay poor-rate it may be safely as-
sumed, that the augmentation, in point of number,
is on a par with the general augmentation of their
countrymen ; and we shall probably not err by
assuming, that our national resources increase in
proportion to our numbers. This opinion, already
advanced in our pages, and about to be more fully
developed in the sequel, we shall for the present
consider as admitted, and extract from the work
of a diligent inquirer into such subjects, (Barton
on the Labouring Classes, 1817,) a table in which
these different considerations are taken into ac-
count.
Table of the Annual Expenditure for the Poor, computed ix>ith
reference to the Price of Corn, and the general Increase of
our Population.
Average
Average of
Annual
Forming a Charge per
Head on the whole
Periods.
price of
Expenditure
Population of the
Wneat.
on the Poor.
Kingdom.
s. d.
£.
From 1772 to 1776.
48 2
1,556,804
44 pints of wheat.
1781 to 1785.
49 2
2,004,238
53 Do.
1799 to 1803.
84 8
4,267,965
54J Do.
1811 to 1815.
93 2
5,072,028
50 Do.
To judge from this sketch, the burden of the
poor-rate, estimated not by the price, but by the
quantity of subsistence, had actually begun to de-
cline before the close of the war ; but instead of
pressing any inference on this head, we point the
attention of our readers to the near approach to
Poor Rate considered as a Tax.
195
uniformity in the real charge at the time of the
greatest apparent variation. This inference is
farther confirmed by the following extract from a
pamphlet on Pauperism, by Mr. W. Clarkson,
published in 1815.
Total of Rates,
Year.
Population of England
and Wales, about
including Highway,
Church, and
Number of
Paupers relieved.
County-rates.
1688
5,300,000
s£665,362
563,964
1766
7,728,000
1,530,804?
695,177
17837
1785 J
8,016,000
2,004,238
818,851
1792
8,675,000
2,645,520
955,326
1803
9,168,000
4,267,965
1,040,716
In the fifty years that elapsed between 1764. and
1814, the increase of our population was as 7 to
11, and the rise in the price of provisions exceeded
the proportion of 7 to 13. It was natural, there-
fore, that the poor-rate of the latter period should
require a sum augmented in this compound ratio;
a sum (24 to 7) more than triple that of 1764 ;
so that we need hardly wonder that 5,000,000/.
should go no further in its discharge in 1814,
than 1,500,000/. in the beginning of the reign of
George III.
Wages paid by Poor Rate. — It is a great, though
very common error to account poor-rate a bondjide
tax, an actual sacrifice to its apparent extent. But
the leading rule of our system, particularly in the
west of England, is, to afford relief to the lower
orders on a conjunct calculation of the price of
bread, and the number of children in a family. An
allowance made on this plan represents less the de*
196 Poor Rate considered as a Tax.
gree of distress prevalent in the country, than the
difference between the market price of provisions,
and the existing rate of wages ; a rate, perhaps,
transmitted with little variation from years of
greater cheapness. It is thus that our poor-law
system was rendered, during the late wars, an ex-
pedient for preventing a rise of wages, as far at
least as regarded country labour, on the avowed
ground, that wages once raised cannot be reduced
without the greatest difficulty.
What, it may be asked, was the effect of the
war on the price of labour generally? To increase
the demand, and to place a number of the lower
orders, whether manufacturers or mechanics, in a
•better situation than in peace. In no department
did it render the demand greater than in agricul-
ture, and in none did the wages of the labourer
experience a greater rise in Scotland ; but in Eng-
land, at least in most parts of England, from the
effects of an artificial system, the case was very
different. Wages were subjected to regulation ;
and their rise, though considerable, being inade-
quate to the rise of corn, the unavoidable result
was a great increase of poor-rate. It is only thus
that we find it possible to explain the remarkable
anomaly, that in a period when farming was flou-
rishing beyond example, the number of agricul-
tural paupers should increase. And here we must
take occasion to qualify the assertion, that paupers
are most numerous in trading and manufacturing
districts. In Bedfordshire and Herefordshire, the
two counties which employ the largest propor-
tion of their inhabitants in agriculture, the same
progressive augmentation of assessment took place,
notwithstanding the great demand for labourers
during the war.
Poor Rate considered as a Tax.
197
Extract from the Report on the Poor Laws, 1817* p. 8,
Expended
on Paupers in
1776.
Average expen-
diture of 1783,
84, 85.
In 1803.
In 1815.
Herefordshire .
Bedfordshire .
s£lO,593
16,663
.€16,728
20,977
£48,067
38,070
£59,256
50,371
The next question is, what proportion of the
poor-rate ought we to deduct from our estimate of
it as a tax, and consider in the light of an equiva-
lent for wages ? This inquiry is complicated, involv-
ing a reference to the rate of wages in Scotland,
and the counties in the north of England, where
poor-rate is comparatively light. The proportion,
besides, must differ materially under different
circumstances, in consequence of the greater or
less demand for labour. In this uncertainty, and
in the absence of the necessary documents, we are
confined to a conjectural estimate ; but if a third
of our poor-rate is to be thus accounted for, we
exclude the idea of a tax or sacrifice to the extent
of nearly 2,000, OOOJ. annually, during the last ten
years.
Mode of assessment. -— Amidst the various sug-
gestions entertained during the agricultural dis-
tress of 1816 was that of rendering the burden of
poor-rate national, instead of parochial ; of paying
it out of a general, instead of a local fund. This
proposition is noticed here, merely to show its ab-
solute inexpediency. Under our present system,
it could be accompanied by no adequate checks, —
by no satisfactory rule for restricting either the
number or the allowance of the pensioners. In
Scotland, in France, in short, in all countries with
which we are acquainted, the relief of the poor is
o 3
198 Poor Rate considered as a Tax.
defrayed by a local contribution. But while we
determine to keep up the distinction of parishes
and townships, and to oblige each to provide for its
poor, there seentis ample room for a change perfectly
compatible with the maintenance of local distinc-
tion : we mean new-modelling the assessment of
property. At present the whole falls on land and
houses ; but would not, we may ask, the income
of the inhabitants of the parish generally, returned
on a plan somewhat similar to that of the property
tax, form a much more equitable basis of reparti-
tion ; particularly since the landed interest appear
to have lost their principal stay — the counterpoise
afforded by the corn laws.
The yearly rental of the land and houses of
England and Wales, on which poor-rate was
collected in 1803, did not (Clarkson on Pau-
perism) exceed .€24,000,000
The latter years of the war exhibited both a large
increase of rental and a more correct return,
the amount assessed, being (Report on the
Poor Laws, 1817) not less than 51,898,000
But increase of demand followed, or rather ac-
companied increase of means : the rate 3s. 7^d.
in the pound in 1 803, was not below 2s. bd. on
the far larger sum assessed in the years 1812,
1813, 1814. At present, whatever be the offi-
cial allotment, the burden bears a larger pro-
portion to our resources, because, since the
great fall of corn the assessable rental of land
and houses can hardly be computed to exceed 40,000,000
In 1803, the sum collected for the use of the
poor was below 4,000,0007. ; and if, in some years
hence, it be reduced, as we anticipate (see Appen-
dix to the chapter on Agriculture) to a sum
(4,500, OOO/.) not greatly exceeding that amount,
it would form a charge of from two shillings to
half-a-crown in the pound on the rent of our land
Our Poor Law System,
199
and houses, valued at 40, 000, (MM)/.; but, if levied
on the income of the parishioners generally,
4,500,000/. would form a rate of less than one
shilling in the pound.
Is our Poor-law System beneficial to the Lower
Orders? — On this much-disputed question we
shall dwell no longer than to point out a few re-
suits, arising from a comparison of documents and
calculations, applicable to the situation of the poor
at different periods. First, it would be a gross mis-
take to take for granted that the rise of wages, and
the increase of parochial aid afforded in the present
age, (more particularly during the twenty -five years
from 1795 to 1820), counterbalanced the enhance-
ment of provisions, and had the effect of rendering
the situation of the lower orders more comfortable
than in the preceding period. A very different
conclusion is suggested by the following calcula-
tion made by Mr. Barton, who, in his pamphlet on
the " State of the Labouring Classes," published
in 1817, shows, that whatever may have been the
case in towns, the wages of the country labourer,
estimated by his power of procuring subsistence,
experienced a considerable diminution in the sixty
years between 1760 and 1 820.
Statement showing the Proportion of the Wages of the Country
Labourer to the Price of Corn.
Periods.
Weekly Pay.
Wheat per
Quarter.
Wages in pints
of Wheat.
1742 to 1752
*. d.
6 0
s. d.
30 0
102
1*761 to 1770
7 6
42 6
90
1780 to 1790
8 0
51 2
80
1795 to 1799
9 0
70 8
65
1800 to 1808
11 0
86 8
60
0 4
200
Our Poor Law System ;
Happily the other articles of the expenditure of
the lower orders, in particular clothing, were en-
hanced in a far less degree than bread. Without
this advantage their situation, favourable as was
the period to our national prosperity, would have
been deteriorated, as will at once appear by a re-
ference (see Appendix) to the table of the consti-
tuents of family expence in the middle and lower
classes. We there find, that while provisions form
only 30 or 40 per cent, of the disburse of the
former, they amount to more than 70 per cent, of
the more rigorously calculated out-lay of the lower
orders. A still more serious confirmation of the
importance of the price of corn to the poor, will be
found in another short extract from Mr. Barton's
tables. Inefficacy in point of relief has seldom
been urged against our poor-law system, but the,
following return shows that it is far from being
completely successful in preventing an increase of
suffering, and even increase of mortality, among
the poor and their children, in times of scarcity.
The return comprises seven manufacturing dis-«
tricts in England, distinct from each other.
Years.
Average Price of Wheat
per Quarter.
Deaths.
1801.
1804,
1807.
1810.
s. d.
118 3
60 1
73 3
106 2
55,965
44,794?
48,108
54,864
It was thus equally desirable, on grounds of hu-
manity and of policy, that the price of provisions
should experience a reduction. It was in 1820
that this took place on a large scale j and the fall
its Effect on the Condition of the Lower Orders. 201
of wages, though considerable, being still far from
proportioned to it, the condition of the lower
orders, at least of all who can find employment, has
experienced a favourable change. Were we in
possession of returns to a late date, Mr. Barton's
parallel of weekly pay and price of wheat (p. 199.)
might be continued, and would exhibit an approxi-
mation to the wages of the middle of last century ;
in some measure in the smallness of the money
amount, more in its efficiency in the purchase of
provisions.
But without such a return, enough appears to
establish the important fact, that notwithstanding
the relief afforded by an increase of poor-rate, the
condition of the labouring classes experiences a
very unfavourable change on the enhancement of
corn ; while, in return, it is greatly to their advan-
tage that provisions should fall and rates be re-
duced. Need we then wonder, that in 1810 the
framers of the Bullion Report should have consi-
dered the situation of the country labourer dete-
riorated by a continuance of high prices, notwith-
standing the increase of parochial aid $ or, that
during the last and present year, ministers should
have accounted the public tranquillity so firmly
secured, as to admit of a large reduction in our
army?
We come next to the objections urged against
our poor-laws, viz. that they induce the labouring
class to contract premature marriages, depress
their circumstances by an undue increase of their
numbers, and accustom them to a state of humi-
liating dependance. Admitting that these charges
are considerably exaggerated (since the poor in-
crease their numbers almost as quickly in Scot-
where there is so little parochial aid), a
Our Poor Law System ;
sufficient proof of the radical defects or absurd
misapplication of our system, is afforded by the
fact, that aid, originally restricted to the aged and
infirm, should be extended to more than a twelfth
part of our population ; for the persons receiving
parish relief in England and Wales, amount, with-
out reckoning children, to nearly a million. But,
unluckily we cannot speak with approbation of the
course as yet pursued in other countries, in regard
to the poor : that which is followed in Scotland is
charged with a degree of indifference to their suf-
ferings in dear seasons ; a time when (Evidence of
P. Milne, Esq. M. P., before the Poor Law Commit-
tee) necessity prompts labourers to undertake task-
work at reduced rates, and frequently to exceed
their strength. A similar feeling must have oc-
curred to most of our countrymen who have lived
on the Continent, and witnessed the habitual priva-
tions of even the sober and industrious among the
lower orders who have families. Hence* a reluct-
ance on the part of many benevolent minds to re-
duce our allowances to the poor, or to relinquish
the hope of solving that most interesting problem,
the means of lessening to them the pressure of a
family. These persons will, we believe, find that
to attain this humane object, the better plan is to
forego our attachment to system, and to relinquish,
as soon as in our power, whatever is artificial in
our regulations, under the conviction that no con-
trivance, however ingenious, no combination,
however plausible, can be so advantageous as the
plain rule of enabling the poor to provide for them-
selves. Much has been lately done to this effect,
by the reduction of the duties on salt and leather :
let our grand object be, the removal of the remain-
its Effect on the Condition qfthe Lower Orders. 203
ing obstacles, whether existing in the shape of
taxes on the necessaries of life, or of restrictions
on employment, such, for example, as arise from
our duties on coals carried coastwise or by canal.
A tax on a necessary of life has, in regard to
the poor, the same operation as the enhancement
of corn : wages do not become proportionally
augmented, and a new pressure falls on those least
able to bear it. The heavy tax on leather imposed
in 1818, was, doubtless^ for a time, an absolute
sacrifice on the part of the lower orders. That
they are indemnified, or partly indemnified, in the
rate of wages, at times when their services are in
demand, we do not deny j but the equivalent is
uncertain, while the sacrifice is unavoidable.
From this painful consideration, we turn to the
consolatory reflection, that " any reduction of the
taxes on the necessaries of life, may, with con-
fidence, be considered the forerunner of a reduc-
tion of poor-rate." The more the charges on the
necessaries of life, in this country, are approxi-
mated to those of the Continent, the more we
perform towards confirming the superiority of our
manufacturers ; resting the support of our lower
orders on the basis of the wide world, instead of
England, and substituting for an eleemosynary
grant, the earnings of independent labour. Is it
necessary that we should specify the advantages
with which our countrymen enter on the field of
competition with their continental neighbours?
They have the aid of productive mines, of exten-
sive water communication, of a minute subdivi-
sion of labour, of habits formed by ages to pro-
ductive industry. These grounds of superiority,
imperfectly perceived by Englishmen who have
%Q4t Our Poor Law System;
remained at home, are amply appreciated by all
who have witnessed the slow progress, the deficient
resources, the general backwardness of most coun-
tries on the Continent.
But while the benefit arising from a reduction
of such taxes is admitted, the practicability of
carrying such reduction to any considerable extent
may be questioned by those who look to the mag-
nitude of the wants of government. These per-
sons, however, would soon modify their objec-
tions, were they to give due attention to a few
fundamental truths, viz. that the only solid basis
of taxation is the extension of productive indus-
try ; that the proceeds of a tax by no means de-
crease in proportion to the reduction of its rate ;
and that new and unforeseen resources are opened
by the increased activity consequent on such re-
duction. Whenever circumstances shall admit of
giving a complete latitude to the course we re-
commend, the public may safely take for grant-
ed, that England will have, if not fewer paupers,
at least fewer real sufferers from poverty, than
any other country in Europe. Our upper classes
would then find their duties towards the poor
greatly simplified; they would be justified in
confining their interference and aid to cases of
urgency ; such as an inclement season, a great and
general transition like that from war to peace ,or
from peace to war ; or, finally, to a time when, as
is at present the case of the lace-manufacturers on
the Continent, a multitude of persons, habituated
to work of a particular kind only, find their earn-
ings suddenly reduced by the introduction of ma-
chinery. Assistance thus conferred would be
substantial charity ; exempt in its consequences.
its Effect on the Condition of the Lower Orders. 205
from the hazard and mischief attendant on our
poor-law system, and, on that account, doubly
gratifying to benevolent minds — to those who,
eager to bestow, are withheld only by a doubt of
their donations producing a beneficial result.
CHAP. VII.
Population.
JTEW subjects in the range of political science
have given rise to more opposite theories than that
of Population. It is now fully a century and a
half since our venerable countryman, Judge Hale,
taking doubtless for granted, like a number of rea-
soners in a more advanced age, that the quantity
of food in a country is limited by physical causes,
declared gravely from the bench, that " the more
populous we are, the poorer we are :" and the
present age has witnessed the promulgation of a
doctrine of kindred import, though somewhat
more elaborately expressed, viz. " that population
is imperatively limited by subsistence.5' This
opinion, proceeding from a writer of extensive re-
search and professorial rank, has been very gene-
rally received, not only in England, but in the
country of Dr. Smith ; a quarter where political
economy forming more particularly a study, we
might naturally have expected a rigid scrutiny of
its merits.
Of the various answers to Mr. Malthus, the
most substantial in argument, though far from the
most attractive in style, is the work entitled the
tl Happiness of States/' published in 18 J 5} by
Mr. S. Gray ; a work of which the leading prin-
ciples were, some time after, developed in a more
Population, $c. 207
condensed and popular form.* Far from coin-
ciding with the uncomfortable doctrine, that in-
crease of numbers leads to increase of poverty,
Mr. G. maintains that augmented population forms
the basis of individual us well as of national wealth.
He has been, on the whole, fortunate in the events
that have followed the publication of his opinion,
the present abundance of subsistence being parti-
cularly calculated to relieve the alarm of those
who considered our numbers likely to outrun our
means of support. Still the public mind is far
from being completely satisfied in regard to the
benefit arising from augmented population : the
reasoning in its favour has not yet made its way
generally, and a want of work among our lower
orders is attributed by many to a population in-
creasing too rapidly for employment, if not for
subsistence. In this view of the subject, we are
far from joining, and proceed to investigate it at
some length, in the hope of finding not only a con-
firmation of the consolatory and cheering doctrine
of Mr. Gray, but of being enabled to go a step
farther, and discover in the prospect of an increase
of our numbers, a source of relief from our finan-
cial embarrassment.
Our principal topics of inquiry shall be —
The condition of society in an early age ;
The change effected by increase of population ;
How far subsistence is limited by physical causes ;
The state of Europe in regard to increase of
numbers and wealth j
The prospect of our own country in these
respects.
* In two lesser works, entitled, respectively, " All Classes
Productive of National Wealth," 8vo. 1817 ; " Gray v. Malthus,
the Principles of Population and Production Investigated," 8vo!
1818.
208 Population ;
Penury of an early Age.— The predilection with
which the popular writers of almost every country
have contemplated a primitive age and the colour-
ing cast over it by romantic imaginations, have
had the effect of misleading the majority of readers,
and rendering them strangers to the privations ex-
perienced by their forefathers. These, however,
were far from inconsiderable : nothing, in short,
could form a greater contrast to the comfort of an
advanced state of society ; and if in England we
are happily unable to find an existing likeness to a
rude age, the sister island will amply supply it.
The Irish peasant, occupying a hovel without fur-
niture, and carrying on his cultivation with
wretched implements, may convey to us an idea of
the state of England five or six centuries ago, as
well as of the present state of a great part of the
east of Europe, of Poland, Russia, Hungary, and
the inland provinces of Turkey. To an English
traveller, the improvement of these countries ap-
pears extremely slow ; but, aided as it is by the
introduction of settlers from Germany and other
parts, it is, of course, far less tardy than the ad-
vancement of Europe in the Gothic ages, when all
were equally backward. In those days, a few cot-
tages formed a hamlet, and many centuries elapsed
ere the hamlet became a village. In point of pro-
perty, extremes predominated: on the one side
was the lord, on the other his vassals ; while the
middle class were few in number, and uncomfort-
able in circumstances.
Effect of increasing Population. — What a different
aspect of society is exhibited after the rise of towns
and the general increase of numbers ! If we com-
pare such countries as Russia, Poland, Hungary,
or the Highlands of Scotland, with the more thickly
Advantages arising from its Increase. 009
peopled districts of the Continent, such as tbe
provinces of Holland, Zealand, Flanders, Nor-
mandy, or, on our own side of the Channel, with
such counties as Lancashire, Warwickshire, the
west riding of York (to say nothing of Middlesex)
we find a surprising difference in the number and
comfort of the middle class. A return of annual
income from the first-mentioned countries, would
exhibit a few princely fortunes, with a long suc-
cession of names below the limit of taxation : in
the other, it would show a number of gradations
rising above each other in a manner almost imper-
ceptible. How different is the England of the
present age, from the England of feudal times,
when our towns were in their infancy, and when
the Commons or middle class were too unimport-
ant to hold a share in the representation, until
brought forward by the crown as a counterpoise to
tbe aristrocacy.
In what manner does the progress of improve*
ment, the transition from penury to comfort, in
general take place ? It has a very close connection
with increase of population : the assemblage of
individuals in towns is productive of a degree of
accommodation, comfort, and refinement, which
would be altogether beyond their reach in an in-
sulated position : the acquisition of one comfort
creates a desire for another, until society eventually
attains the high state of polish which we at present
witness in a few countries of Europe. All this,
says Mr. Gray, leads the consumer to make fresh
demands on the producer ; demands reciprocated
by the latter on the former, in a different line of
business. Hence, the dependence of one class on
another j hence, the prosperity caused to agricul-
ture by the success of trade, and to trade by the
p
210 Population]:—
success of agriculture. It is of no great conse-
quence to our argument, whether these wants are
of first or of second necessity, that which is deemed
a superfluity in one country, being accounted no
more than a comfort, a requisite in another. But
what, it may be asked, is the criterion of the dif-
ference in this respect between different countries?
The relative density, not of population generally,
but of town population. This is apparent in almost
every link in the chain of European civilization,
Holland having in the seventeenth century taken
the lead of England, exactly as England at present
takes the lead of France ; France of most parts of
Germany, and Germany of Spain and Poland.
The distinction of town population from popu-
lation generally, is important, for were districts
strictly rural comprised in the calculation, Ireland
would claim an equal rank with England, and
Flanders take precedence of Holland. It is in
towns only that we reap the advantage of col-
lective over scattered population ; — an advantage
consisting in extensive markets ; a minute subdi-
vision of employment ; the greater dispatch and
finish of workmanship, and a supply of occupation
to individuals of every age and every degree of
capacity.
It is but too common among unthinking persons
to consider new-comers as unprofitable intruders, —
as dealers, not customers, — as sellers, not buyers.
This, however, is but a superficial view, a first im-
pression, for there is very little reason to doubt
that in one way or another, these persons will dis-
burse in proportion to their earnings ; and when
it happens that they do not, the only source of
detriment to the public is the practice (now very
rare) of hoarding j for money saved and lent at
Is Subsistence limited by physical causes ?
interest becomes of service to the community, in-
creasing the capital of the country, and lowering,
or contributing to lower, the premium paid for its
use. We may thus take for granted that much
public advantage arises from the arrival of new
settlers, whether manufacturers, such as England
and Prussia acquired from France on the repeal of
the edict of Nantes, or agriculturists, such as
Canada and the United States are now receiving
from us.
Population, however, is generally augmented
less by settlers from a distance, than by a local
increase ; by an excess of births over deaths ; a
mode, which, very different from the easy acqui-
sition of foreigners of mature age, implies a long
and often a heavy charge, until the youth of either
sex acquire the strength or knowledge requisite to
their support ; requisite, in the language of the
economist, to constitute them " producers as well
as consumers." Though in such a case the acqui-
sition of new members is much more dearly
purchased, the effect in a statistical sense is the
same as in the case of arrivals from abroad.
Is the amount of subsistence limited by physical
causes ? — We now come to the much disputed
point of the physical limits to increase of popu-
lation ; to the question, whether it is imperiously
limited by subsistence, or possesses the power of
augmenting subsistence in proportion to its own
increase. The well known argument of Mr. Mal-
thus is, that population, if unchecked, would
proceed in a geometrical ratio (1, 2, 4, 8, 16, 32,
&c.), while the supply of food cannot, he thinks,
be brought by the greatest efforts of human skill
and industry to increase otherwise than in the
p 2
2 i £ Population : —
arithmetical ratio of 1,2, 3, 4, 5, 6, &c. This sup-
position, however, is altogether gratuitous, the
idea of a geometrical ratio applied to population
being founded on a single example, that of the
United States of America, a country presenting
a remarkable combination of advantages ; — a terri-
tory of vast extent ; a river navigation of great
importance ; a people enjoying unrestricted inter-
course with the civilized world, and closely
connected in language and habits with the most
commercial and colonizing portion of Europe.
Such an example is necessarily rare, and ought to
be considered an extreme case : a more satisfactory
result as to the average increase of population
would be obtained from a combination of cases,
among which, assuming the United States as the
example of the most rapid augmentation, we may
take, as the second, England, in which, under
circumstances more favourable than on the Con-
tinent of Europe, but less so than on the other
side of the Atlantic, population has doubled within
the last century, and bids fair to double again in
sixty or seventy years. As a farther example, we
may take France, where, though the records are
far from accurate, the doubling of the population
appears to require a term of from 100 to 120 years.
Other countries exhibit a greater or less degree of
slowness in the ratio of increase, and as these
returns apply to them when exempt from the
visitation of war, pestilence, or any violent check
to increase of numbers, Mr. Gray's inference is,
that the average furnished by the whole may be
assumed as indicative of the natural progress of
population, in preference to the result afforded by
a country the circumstances of which are altogether
peculiar.
Is Subsistence limited by physical causes ? 213
After establishing that the natural ratio of in-
creaseis less great than is advanced by Mr.Malthus,
Mr. Gray proceeds to argue that such increase is
no farther limited by the difficulty of obtaining
food, than by the difficulty of obtaining clothing or
lodging, because the supply of food, though ap-
parently restricted by a physical cause, is, on a
closer examination, found to depend on the amount
of capital and labour applied to raising it. In
arguing this very interesting question, Mr. Gray and
the other opponents of Mr. Malthus, would do well
to guard against the charge of over-confidence, and
to make a distinct admission of the difficulty of
raising a family, a task which to the middle classes
is one of labour and anxiety ; to the lower classes,
of toil, privation, and often of distress. Of this
heavy burden, what portion is to be ascribed to
the charge of food ? In the middle classes, food
forms (see Appendix, p. 93.)' between 30 and 40
per cent, of the whole expence of a family ; but
in the lower from 50 to J5 per cent., constituting
thus, the grand article of charge in that class in
which the pressure of a family is most severely
felt. After this precautionary statement, we may
safely allow Mr. Gray and his followers to give a
latitude to their inferences, comprehensive as they
are, viz. : —
That the quantity of subsistence in the world
may be augmented in the same manner, and by the
same means, as the quantity of our clothing, or the
size of our dwellings ; and
That an addition to our numbers implies no
diminution of individual income or property.
Such assertions would have appeared not a little
extraordinary during the greatest part of the war,
when a continued insufficiency in our agricultural
T 3
Q14< Population : —
produce favoured so strongly the negative doctrine
of Mr. Malthus : they would have been received
also with no small surprise during 1817 and 1818,
when a scarcity of provisions, a general irregu-
larity in the state of our productive industry,
concurred to produce apprehension in regard to
our increasing numbers. But a different lesson
has since been taught us : we have now evidence that
numbers, increased greatly beyond anticipation,
may draw their subsistence from the same terri-
torial surface ; that produce may be greatly aug-
mented without bringing new soil into cultivation.
A similar result from a similar cause has been
exhibited on the Continent of Europe, and if we
refer to history, in particular to the long periods of
peace subsequent to the treaties of Westphalia and
Utrecht, we shall find the application of extra capital
and labour producing a super-abundance of corn,
although our ancestors, like ourselves, were under
the firm impression of physical limitation to the
productive powers of the soil,
Comparison of the present with former Periods. —
How far does the preceding opinion appear to be
confirmed by a general retrospect to the past ? Were
it true that the acquisition of subsistence becomes
more difficult as our numbers increase, we should
naturally expect to find the greatest abundance in
a remote age ; in times when the number of con-
sumers was small, relatively to the extent of terri-
tory. But if we look back to the earliest periods of
authentic history, to the ages when Greece and
Italy were most thinly peopled, we find neighbour-
ing tribes maintaining sanguinary struggles with
each other, the motive of which, as far as regarded
the lower orders, was the hopeof acquiring
Is Subsistence limited by physical causes ?
tional territory, and increased means of subsistence.
It is thus that we are to explain the obstinate war-
fare for small but fertile districts, such as the plain
of Thyria, the plain of Tanagra, the Colles Tuscu-
lani, to say nothing of contests, in a record of
higher authority, for the valleys of Palestine, or
the banks of the Jordan. Had subsistence been
abundant in these days, the inhabitants of the
towns of Greece would have shown less eagerness
in emigrating to new colonies ; while at Rome,
the demand of an Agrarian law would have been
a less powerful lever in the hand of demagogues.
But to confine our examination to our own country,
and to times comparatively recent, how different
is the present situation of our lower orders from
that of their ancestors under Henry VIII., or
under our admired Elizabeth, when, without any
disposition to severity on the part of the sovereign
or her ministers, the number of capital punishments
(Speech of Mr. Fowell Buxton on our criminal
code, May, 1821), averaged no less than five hun-
dred annually ! Various causes, in particular the
want of education, must have contributed to this
unfortunate prevalence of offences, but can any
be supposed to have operated so largely on the
part of the commonalty, as the difficulty of ob-
taining subsistence, although in that age our popu-
lation did not exceed a third of its present number ?
But what, it may be asked, was the cause of
another circumstance, — of the supply of subsistence
being so scanty, when the number of consumers
was so small ? Of this problem the solution is to
be sought in the unproductiveness of even the
fairest tracts so long as they remain in a state of
nature. Whatever be the serenity of the climate or
the richness of the soil, they continue unavailing
p 4
Population: —
to any Useful purpose, tirilil the application of la-
bour: by labour only can over-luxuriance be correct-
ed, the forest cleared, a super-abundance of water
removed from one spot, a deficiency of it supplied
in another. It is to the performance of tasks like
these, the most acceptable of any in an early age,
that we trace the honours so liberally bestowed in
ancient mythology, — the apotheosis of the warrior
who drained the Lernasan marsh, and combated
the savage occupants of the woods. But we are
under no necessity of dwelling on an age of tra-
dition, on a scene embellished by fiction : if we
turn to plain reality, — to the times in which we live,
and to a people noted for their adherence to the
pursuit of substantial profit ; if, in short, we fix
bur attention on the western states of America,
or oh Upper Canada, we shall find an example
abundantly convincing of the unproductiveriess of
the finest tracts until improved by labbiir and
capital.
It would be easy to multiply illustrations from
history, but as our limits hardly admit of detail,
we extract from one of the works already men-
tioned (Gray versus Malthus), a summary of the
leading ideas in the opposite systems of population.
Mr. Malthus's leading Ideas. Mr. Grays leading Ideas.
The increase of population has The increase of population
a tendency to overstock, and tends to increase the average
to lessen the average amount amount of employment to
of employment to individuals. individuals.
The increase of population has The increase of population has
a natural tendency to pro- a tendency to increase
mote poverty. wealth, not collectively only,
but individually.
The natural progress of popu- We have no rule for estimating
latioh is according to the the natural progress of popu-
geometrical ratio 1, 2, 4, 8, totion ; the United States
Is Subsistence Unitedly physical causes? £17
Mr. Malthuss leading Ideas. Mr. Grays leading TV/-
16, as evinced in the case are a solitary case, no other
of the United States of country increasing in the
America. ratio ; and, if an estimate is
to be made, it would be
more fair to take the average
of a given number of coun-
tries.
So Far Mr. Gray's ideas seem to require very
little qualification ; with the following the case is
somewhat different :
Mr. Malthus. Mr. Gray.
The amount of subsistence The amount of population re-
regulates the amount of gulates the amount of sub-
population, sistence, in the same way as
it regulates the supply of
clothing and housing, be-
cause, with the exception of
occasional famines, the quan-
tity of subsistence raised
depends on the amount of
labour bestowed on it.
Population has a natural tend- Population has a tendency to
ency to increase faster than increase, but this increase
subsistence. carries in itself the power of
supplying its wants.
Our animadversions on these propositions of Mr.
Gray, relate less to the argument than to the ex-
pression. That subsistence is augmented by labour
and capital, in the same manner as manufactures
and buildings, is perfectly true ; but, as in the
case of four-fifths of mankind, food forms by far
the greatest article of charge, we may excuse
writers of a less sanguine character for over-rating
the difficulty of procuring it. From the unquali-
fied, and sometimes confident tone of Mr. Gray,
' an inhabitant of Canada or the United States
218 Population : —
might fall into the grievous miscalculation, that to
procure food for a family in Europe, was a task of
no greater difficulty than in his own country.
Progressive Increase of Population in Europe.
The arguments in the preceding table are of ge-
neral application, referring to the state of mankind
in every age and country. To give the question
a more specific form, we shall now introduce a few
statistical results, and fix the attention of our
readers on the quarter of the globe with which
they are best acquainted.
Effects of Soil and Climate. — Fertility of soil is
too directly conducive to increase of numbers, to
require illustration ; but in point of climate, we
cannot avoid remarking that the superiority of one
part of Europe over another, is, as far at least as
regards the productive power of the soil, much
less than is commonly imagined. The great art
of the husbandman consists in adapting the
object of culture to the peculiarity of the tem-
perature. In various parts of Scotland, accounted
half a century ago unfit for wheat culture, the pro-
gress of improvement has led to raising that grain
both in abundance and of a quality fit for the
London market ; while in the boasted climate of
the south of France, the season is often too dry
for wheat, and the frequent failure of that crop
seems to point out maize as a more appropriate
object of tillage. In regard to potatoes, the cul-
ture of which is so directly connected with density
of population, the warmest and finest climate of
the Continent has no superiority over our own. It
is thus only, when in extremes, as in the bleakest
Causes of its Increase in Europe. 219
tracts of Russia, Sweden, and Norway, that cli-
mate has operated materially to restrict produce
and population : the physical superiority of the
south of Europe, whatever may be its eventual
effect, has as yet been balanced by the political
advantages of the north,
Effect of Communication by Sea, Rivers, Canals,
Roads. — The effect of prompt communication in
promoting commercial intercourse is sufficiently
apparent, but its tendency to increase our numbers
may require some explanation. What, in the
first place, are the advantages enjoyed by the in-
habitants of towns over those of the country ; by
a collected over a scattered population? They
consist in a more ample field for sale or purchase ;
a better division of employment ; greater dispatch
and finish of workmanship ; — a more varied supply
of occupation, so as to suit individuals of almost
any degree of strength or capacity. Now these
advantages, arising, in a large town, from concen-
tration of numbers, may, in a great degree, be
enjoyed by places comparatively small and at a
distance from each other, when connected by
rivers, canals, or a line of sea-coast. Such was
the origin of the prosperity of Greece ; such, at
present, is the cause that the maritime part of
her population make a figure not altogether un»
worthy of their ancestors. It is thus that the seve-
ral towns of Holland, Zealand, and Flanders, have
for many centuries maintained an active inter-
course with each other ; that Paris is so closely con-
nected with Rouen and Havre de Grace; that Swit-
zerland maintains by the Rhine an intercourse with
Holland ; and that in England, particularly since
the multiplication of canals within the last seventy
Population : —
years, the conveyance of coal, iron, salt, and other
bulky commodities, is so much facilitated. On the
other hand, the want of such intercourse is, as
as we shall see presently, the principal cause of
the backwardness of Spain, Poland, the south of
Germany, and in no inconsiderable degree, of
France.
Effect of the Protestant Religion. — The progress
of the reformed faith has conduced greatly to the
increase, not only of the comfort, but of the popu-
lation of the nations by whom it has been em-
braced. Among its other effects, are a more ge-
neral diffusion of education, and an exemption of
the labouring classes from the loss of time attend-
ant on the endless holidays of the catholic church.
In agriculture, the operation of these advantages
is less apparent, most countries sufficing wholly,
or nearly, to their own consumption, while the in-
sulated position of the husbandman prevents, in a
great measure, the benefit arising from competition
and frequent personal communication. But in
manufactures, particularly in those prepared for
foreign sale, the case is very different ; the ease
of transporting them to a distant market, and of
comparing their respective quality and price, opens
a wide field of competition, and awards the pre-
ference to superior skill and ingenuity. Accord-
ingly, though the catholics of Europe are much
more numerous than the protestants, the far larger
share of exported merchandize proceeds from pro-
testant countries, the labour of the Flemings, the
French, and the northern Italians, forming a feeble
counterpoise to those of the Silesians, the Saxons,
the Prussians, and, above all, of our countrymen.
In Ireland, linen weaving, the only great branch
Causes of its Increase in Europe.
of manufacture, is almost wholly in the hands of
protestants.
We proceed to apply this reasoning to the pro-
gress of population in Europe, availing ourselves
of the official returns which have been made in
most countries in the course of the present age,
and which supply the following abstract : —
Inhabitants
per square Mile.
East Flanders - 554?
West Flanders 420
Holland (Province of) - 362
Ireland - - 237
England distinct from Wales - - 232
Austrian Italy, viz. the Milanese and the Ve-
netian States - 219
The Netherlands, viz. the Dutch and Belgic
Provinces, collectively - 214-
Italy - 179
France - - - 150
The Austrian Dominions - - 112
The Prussian Dominions ... 100
Denmark - 73
Poland 60
Spain ..... 58
Turkey in Europe (conjectural) - - 50
Sweden (distinct from Norway and Lapland) 25
Russia in Europe - 23
Here are, indeed, some very remarkable dif-
ferences in population, and to trace this diversity
to its source, is an object of no slight interest.
Flanders possesses, in a high degree, the main
causes of dense population, fertility of soil, and ease
of communication, having on the north the sea
and the Scheldt, while the flatness of its surface ad-
mits easily of intersection by canals. Accordingly,
so early as the 12th century, when productive in-
dustry was in its infancy in every part of Europe,
except Pisa, Venice, Genoa, and a few other
Population: —
towns of Italy, Bruges was a place of commercial
eminence, a kind of centre for the intercourse of
the north-west of Europe. In this it was succeed-
ed by Antwerp and Amsterdam ; but though Flan-
ders has long ceased to have much foreign trade,
its population and manufacturing industry have
not declined. The great articles of its produce
are, corn, hemp, and flax; of its manufactures,
linen, lace, leather, and, in latter times, cotton.
Of cities, it contains only two, Ghent and Bruges,
and their conjunct population does not exceed
90,000. But it abounds in towns and villages
which are populous, though not noticed in history,
and hardly in geography.
Of the Dutch provinces, the most- remarkable
for population, as for other characteristics, are
Holland and Zealand. On the ground of fertility
they have little claim to density of numbers, the
soil being, in general, ill adapted to tillage ; but
in ease of water communication, they surpass every
other part of Europe. The mouths of the Rhine,
Maese, and Scheldt, afford capacious inlets for
foreign commerce, while the level surface of the
territory admits of easy intersection by canals.
These provinces possessed, consequently, consi-
derable population and trade before the 16th cen-
tury, when their prosperity was confirmed by the
adoption of the protestant religion, and by the esta-
blishment, after a long struggle, of an independent
government.
How far does fertility of soil account for the in-
crease of population in England ? Inferior to se-
veral tracts on the Continent, such as Flanders or
the Milanese, but more fertile than the mountains
of Spain or the levels of the north of Germany,
the soil of England may be said to hold a medium,
and to have a claim to rank with the average of the
Causes of its Increase in Europe.
French and Austrian territory. This would have
determined a population in the present age of
perhaps 150 to the square mile : the additional
number is, as far as regards physical causes, to be
attributed to our insular position and the produc-
tiveness of our mines ; advantages which lead so
directly to the increase of our manufacturers, sea-
men, and traders. In ease of inland navigation,
England is second only to the Dutch provinces.
Inland Countries : Austria and Prussia. — From
these examples of maritime prosperity, we pass to
inland countries, and begin by the dominions of
Austria, which, with a slight exception, are at a
distance from the sea, traversed by few navigable
rivers, and by hardly any canals. Though equal
to France or England in fertility, the communi-
cation between the different provinces is difficult,
the progress of improvement extremely slow, ma
nufactures backward, and population compara-
tively thin. Prussia, in like manner, has few
harbours or navigable rivers, indifferent roads, and
canals that are only in their infancy : the majority
of her subjects enjoy the advantage of the protest-
ant religion, and of an education less imperfect than
that of their southern neighbours ; but her popu-
lation is thin, in consequence of a great part of
her territory being sandy or marshy.
A still stronger example of the disadvantage of
an inland position is afforded by Poland. That
country, without possessing all the fertility vul-
garly ascribed to those which export corn, is not
naturally below the average productiveness of Eu-
rope. Its climate, if in winter it partake of the
rigour of Russia, is in summer favourable to corn
culture, and the great impediment to the increase
224- Population : —
of its produce is not a mountainous surface, but a
cause more within the remedying power of indus-
try — extensive marshes. Still, its population is
scanty and wretched, the causes of which, in a
political sense, are, long continued misgpvern-
ment, a bigotted creed, the almost total neglect of
education ; in a physical, the difficulty of commu-
nication, the extent of sea-coast being small, the
roads proverbially wretched, and the access to the
interior by the Vistula, circuitous, and too con-
fined for so large a tract of country.
France. — Between these extremes, our ancient
rival forms a medium, possessing a considerable ex-
tent of coast, but labouring also under the disadvan-
tage of an inland territory, square in its form, slightly
penetrated by navigable rivers, and having, as yet,
very few canals, with roads good only in particular
directions* Compared to the Austrian or Prussian
states, France is an improved country, but the
case is far otherwise when put in competition with
the Netherlands or England. Superior to our
island in climate, and equal to it in soil, she is
greatly inferior in density of population, and still
more in the average income of individuals. Of
her population, two-thirds (above twenty millions)
live in the country, and her peasantry partake, in
many provinces, of the poverty of those of Ireland.
In the size of her towns, this great kingdom, so
long the dread of our ancestors and of Europe,
has, in the last and present age, been altogether
surpassed by England and Scotland ; for though
our island boast only half her population, the distri-
bution of it is made, in a manner, far more condu-
cive to efficiency in a commercial and financial
sense. This is, at once, apparent from a com-
parison of the twelve principal towns in each.
Causes of its Increase in Europe.
Population Return of 1821,
ENGLAND AND SCOTLAND.
London, Westminster,
Southwark, and the
adjoining parishes
Glasgow with suburbs
1,225,694
147,045
Paris -
Lyons
Edinburgh, with Leith
and their suburbs
138,235
Marseilles
Manchester, with Sal-
ford
155,788
Bordeaux
Liverpool ...
118,972
Rouen
Birmingham with Aston
106,722
Nantes
Bristol and suburbs
87,779
Lille
Leeds and suburbs
85,796
Strasburg
Plymouth, with Dock
and suburbs
61,212
Toulouse
Norwich -
50,288
Orleans
Newcastle onTyne, with
Gateshead
46,948
Metz
Portsmouth with Port-
sea ...
45,648
Nimes
FRANCE,
- 720,000
- 1 1 5,000
- 102,000
92,OOO
86,000
77,000
- 60,000
- 50,000
50,000
42,OOO
- 42,000
40,000
Ireland. — In our enumeration of towns we have
omitted those of Ireland, because the situation of
that country is peculiar. Possessing, in point of
navigation, maritime and inland, advantages equal
to those of England, her towns are comparatively
small, her manufactures considerable in one pro-
vince only. To what, then, is owing the remark-
able density of her population ? To two causes,
fertility of soil, and the habit on the part of the pea-
santry, of subsisting on a food, the produce of which,
on a given spot, is much larger than that of the
wheat, the rye, or the oats, which, in other parts
of Europe, form the basis of national subsistence.
Italy. — Few countries surpass Italy in natural
advantages ; in soil, in climate, extent of sea
coast, and, in her northern part, in the means
of inland navigation. But a bigotted creed has
confirmed the indolence inspired by the climate,
and her unfortunate division into petty states, has
prevented measures for the advancement of her
productive industry. Though more populous
Q
Population : — Connection between its
than France, her inhabitants have a smaller aver-
age income : the want of a concentrated govern-
ment may be considered the cause of lighter
financial burdens, but the advantage is balanced or
more than balanced by the loss of that rank among
the states of Europe, to which this country is en-
titled by her population and geographical position.
Spain has a climate, on the wrhole, favourable,
but in respect to territorial surface, is, after
Switzerland, the most mountainous country in
Europe. Having, all along, been deprived of the
blessings of good government and enlightened re-
ligion, the physical obstacles to communication
between one district and another, have been very
little lessened by exertion on the part of the
inhabitants : the roads are few and indifferent,
while of canals there are hardly any. Her great
extent of sea coast, ought, it may be thought, to
have remedied these disadvantages, but the small
number of her navigable rivers has confined this
benefit to the outskirts of her territory, leaving the
interior untra versed and almost unopened. Thus,
with the exception of Catalonia, Biscay, and part
of Andalusia, Spain exhibits all the backwardness
of a country deprived of water communication.
Portugal is more favourably circumstanced ; she
has two great inlets from the ocean, the Tagusand
Douro, so that without surpassing Spain in climate
or soil, she is enabled to pay a larger revenue.
Russia and the north of Sweden, form an ex-
ample of extreme thinness of population, conse-
quent, partly on rigour of climate, partly also on
difficulty of intercourse.
Having thus explained the increase of European
population, we are, in the next place, to examine
and the Increase of Wealth.
the circumstances connected with the increase of
its wealth.
Our experience since the peace, unfortunate
as it has been to particular .classes of the commu-
nity, has put beyond doubt one material point,
we mean our power of subsisting an increased po-
pulation. The case of England is that, of Europe
at large, and even anti-populationists can hardly
apprehend that such abundance is temporary, or
that the civilized world is at all in hazard from in-
sufficiency of subsistence. Equally little can they
deny that increase of national weajth, has, for a
long time, accompanied increase of numbers.
Such has evidently been the case in France, in
Germany, in the countries along the Baltic, and,
above all, among ourselves.
But while the facts are undoubted, the inference
that the increase of wealth has been a consequence
of the increase of numbers, will not be so readily
granted : from the adherents of Mr. Malthus, it
is not to be looked for, nor do we expect it fpr
some time from the majority of our public men.
We proceed, therefore, with caution, and begin
the argument in favour of population by a few plain
questions, such as " whether, when the same por-
tion of public burdens is distributed over a greater
number, the pressure on the individual is not ne-
cessarily lightened ?" Our revenue arises chiefly
from consumption : each individual bears his part,
and the 50,000,0007. at present paid by somewhat
less than 15,000,000 of inhabitants in Great
Britain, will obviously give a smaller average per
head when they shajl come to be shared among a
population of 16,000,000. Our next question is,
" whether the effect of augmented numbers, in
adding to the revenue, has not been remarkably ex-
228*"*" 'Population : — Connection between its
amplified in the present age : whether it had not
an important share in swelling the product of our
taxes during the war, and in preventing their di-
minution since the peace ?"
If these preliminary points are admitted, we
proceed to put the more general question, whether
" when a greater population is maintained in equal
comfort on the same territory, the wealth and
power of the community are not increased ?" The
proof of this rests chiefly on the power (p. 146.) of
an increasing population to provide for itself, and to
augment its subsistence as it augments its number.
A farther argument, and one more easily intelli-
gible by readers of history, may be deduced from a
comparison of the present means, financial and
military, of the states of Europe, compared with
what they were two centuries ago. How feeble
do we find the establishments of France, even when
administered by Sully ; of England, when guided
by Burleigh ; of Austria, when stimulated by the
vigour of Charles V., if we compare them to those
of the same powers at the present day ! The army
of Henry IV. of France, was, when at the highest,
only 40,000 men : the revenue of queen Elizabeth
was 600,000/.* Even the Spain of Philip II., aided
by the mines of America, is found, when her re-
venue and her army are brought to the test of
accurate computation, to have been on a par with
only the second-rate powers of our age.
Increase of Income to the Individual. — Taking
it therefore for granted, that as to national income,
no doubt can be entertained of an increase conse-
quent on the increase of our numbers, we proceed
* Napier's Supplement to the Encyclop. Brit, under the
heads of England and France.
Increase and the Increase of Wealth.
to investigate the effect on individuals, and to ask,
whether an augmented population tends to expand
or contract their separate earnings ? This ques-
tion Mr. Gray has no hesitation in answering in the
affirmative, it being one of the fundamental articles
of his population creed, that an increase in the
numbers of a nation or society, tends, not only to
keep up, but to improve the income of its mem-
bers : that the 20/. forming the average income of
individual labourers in one age, may, and, in fact,
is likely to become 2 1/, in the next ; or to express
it in a comprehensive form, that " the more varied
the classes of a community, the more they con-
duce to the welfare of each other/*
This highly interesting conclusion is founded on
the various advantages attendant on concentration
of numbers. These, when treating of town popu-
lation, we showed to consist in the subdivision of
labour ; the consequent superiority both in expe-
dition and quality of workmanship ; also the means
of giving employment, of some kind or other, to
persons the most different in education and attain-
ments. In proportion as employment becomes
sub-divided, the efficiency of the individual is
increased, and the same labour enables him to
furnish commodities, superior, either in quantity
or quality, generally in both. Besides, the con-
centration of numbers is perpetually giving rise to
discoveries and inventions, the effect of which,
when at all entitled to the name of improvement,
is to render the articles produced either cheaper
or better.
Connection between Density of Numbers and In-
crease of Wealth. — We proceed to put this doctrine
to the test, by a reference to the returns of taxation
and other public burdens, in different countries of
Q 3
Population : — Connection between its
Europe. These, we are aware, do not furnish an
unexceptionable criterion of national wealth, as
the proportion of public burdens may differ from
circumstances unconnected with the state of pro-
ductive industry, such as the greater or less par-
ticipation of a particular country in war, since the
adoption of the funding system. They form,
however, the least defective basis, the neatest-
approximation to the truth in the pfeserit imperfect
state of public surveys ; for few countries have been
the object of an assessment sd directly calculated
to convey an estimate of national wealth, as the
property-tax of England or the fdneier of France.
Population Proportion of Public Burdens
per square Mile. paid by each Individual.
England distinct from Scot- 7 £ *• <*•
land and Wales - j 232 - 320
England, Scotland, and 7
Wales, collectively - J 165 2 15 0
The Netherlands* - 214 1 10 0
France - - 150 - 140
The Austrian Empire -il2 t) 12 4
The Prussian Dominions 100 0 13 4
Denmark - 73 0 16 3
Spain - - £8 0 11 6
Sweden - - 25 0 10 0
Russia in Europe 23 d & 9
The maritime provinces of Holland and Zea-
land, are perhaps as heavily taxed as England, the
charge of defence against the sea, added to the
interest of a heavy debt, contracted during two
centuries, rendering the total assessment probably
equal to our 31. <2s. per head. France exhibits a
medium in her taxes as in her population : while
in our case, the increase of taxation since 1792, has
k The repartition of taxes is here very unequal, the Dutch
provinces, particularly those of Holland and Zealand, paying
much more than I/. 10$. a head, the fielgic considerably less.
Increase and the Increase of Wealth. 231
been more than double the increase of our popula-
tion, in France the proportion of the former has
outstripped that of the latter only by a fourth, or
£5 per cent. Still the average payment per head
is much greater in France than in the Austrian
empire, a country ay equal to France in fei>
tility, but devoid of the means of communication
afforded to the latter by better roads and a con-
siderable extent of coast.
The population of Denmark, though more thinly
spread than that of Austria or Prussia, pays a
larger average contribution, the chief cause of
which must be the extent of water-communication.
There is, however, in more than one country
of Europe, an example of slender payments on the
part of a populous community such as,
Population Payment per Head,
per square Mile. only
a£ S. d.
Ireland 237 0110
The Milanese and Venetian") 010 ~ ,~ •
Territory - j
The Neapolitan Dominions 154- 080
These appear exceptions of no slight amount to
Mr. Gray's rule, but they admit of an easy ex-
planation. In Italy, as in Ireland, the far greater
part of the inhabitants are cottagers ; while in the
Neapolitan states, the poverty implied by that con-
dition of life is perpetuated by habits of indolence.
Farther, the situation of cottagers even in a popu-
lous district, is insulated and unsuited to that
division of employment, that promptitude of
co-operation which constitute the advantage of
towns, so that the smallness of these payments,
instead of invalidating Mr. Gray's rule of wealth
arising from collective numbers, is found to afford
an illustration of its accuracy.
Population ,• — Connection between its
Town Population ; farther Arguments for its su~
perior Wealth. — The resources of a town popula-
tion have been exemplified in the Dutch provinces
of Holland and Zealand during two centuries, by
the payment of an amount of taxation almost
unparalleled in the annals of finance. At a time
when in England, the majority of the inhabitants
lived, as at present in France, in the open country,
Holland had accumulated the larger part of her
population in towns ; and though their numbers
have now experienced a decrease, Amsterdam and
the eight cities situated within a circuit smaller
than one of our middle sized counties, still con-
tain a population of more than 400,000, a density
surpassed only by London and Paris, and which,
rapidly as the numbers of our manufacturers in-
crease, will hardly be equalled in the present age
by the town population of either our cotton, our
woollen, or our hardware districts.
These districts, however, and the parts of our
island rendered populous by navigation, already
confirm the result exhibited by Holland, the ave-
rage return of income being, as was shown by the
property -tax, considerably greater than that of the
same number of individuals in less populous quar-
ters. In like manner in France, the returns made
to government under the fonder, or tax on the
income of landlords, farmers, and house pro-
prietors, show that the revenue not only of the
public but of the individual, is smaller where the
numbers are thinly scattered, — smaller in the
mountainous departments of the south, than in the
more fertile and populous districts of the north.
It may, however, be objected, that an estimate
founded on taxation does not do justice to the
property of a rural population, who, in many parts
Increase and the Increase of Wealth. $33
of the Continent, seem almost to escape the grasp
of the exchequer. This exemption, however, is
limited chiefly to excise dues, and is, in a great
measure, balanced by a heavy land-tax, which,
under different names in different countries, forms
the basis of continental taxation, and is included in
the statistical return in the Appendix to this
chapter. In the main articles of food and fuel
the peasantry are often better provided than the
lower orders in towns, but in other respects there
are on the Continent the same reasons as in
England for allotting the superiority in property
to the latter. It is in a large association only that
activity and talent find an adequate field ; that the
command of capital, the co-operation of assistants,
can be turned to account : there is, hence, no com-
parison between town and country in the propor-
tion of those who from poverty attain the comfort
of a middle station ; to say nothing of those who
reach a high rank in the scale of property.
Farther, as every country raises food for the far
greater part of its consumption, density of town-
population implies in general an advanced state of
agriculture: it is along with such density that
we find extensive farms, a general application of
machinery, and a variety of improvements which
enable cultivators to send to market a much larger
proportion of produce than can be spared in a
country like the centre and south of France, where
all work being done by manual labour, the larger
share of the produce is necessarily consumed by
those who raise it. In all respects, therefore, a
numerous town-population is a proof of national
wealth.
What then is our conclusion in regard to Mr,
234 Population / —
Gray's doctrine, of the tendency of income to
increase along with population ? That it is no less
sound and accurate than it is cheering, and that
in expressing an assent to it, we are aware of only
two qualification's being necessary ; viz.
That increase of individual iricome does not
hold in the case of cottagers, or any population in
an insulated form ; and next,
That an inferiority of numbers may, as in the
case of Denmark, be counterbalanced by the
advantage of ready communication by water.
Subsistence more easy of Acquisition as Society ad-
vances.— The late wars, remarkable as they Were for
frequency of bad seasons and exorbitant charges
6ri the transport of corn, exhibited no examples of
local suffering equal to those which marked the
latter years of the' 16th and l?th centuries. The
cause is td be sought in the general improvement
of our roads, canals, and maritime navigation ;
also in the greater means of purchase afforded by
the diffusion of employment, chiefly mechanical
and manufacturing, throughout almost every
corner of the island. One part of the kingdom is
thus enabled to £ome to the relief of the other, and
prices are kept nearly on an equality throughout.
To this source of relief at home, is added, parti-
cularly since the peace, a supply from abroad,
arising from the extension of tillage over countries
in a manner unknown to our ancestors. In our
chapter on Agriculture, (p. 149.) we took occasion to
remark that that which formerly constituted the corn
country of Europe, meaning the country produc-
ing corn in sufficiency for export, is comprised
between the 45th and 55th degree of latitude, and
Acquisition nf Subsistence.
has a similarity of clirriate greater than Is supposed
by those of otir countrymen who have not travelled
or studied the tenhperature of the Continent. This
remark applies to the Netherlands, the north of
France, the north bf Germany, Denmark, a^nd
even to part of Poland, all too similar to our coun-
try in latitude and vicinity to the sea; to escape a
participation in those causes of deficiency^ whet her
arising from want or excess of rain, which, from
time to time, affect our harvests. Btit the exten-
sion of tillage along the shores of the Eiixine, and
the increased cultivation of the Ufilted States, af-
ford hew sources of supply : these etMntriefc are
distant, indeed^ and the amount of import from
them, must, from' the cost of cdnveyahce, neces-
sarily be limited, but it will proceed frbrri climates
not likely to be affected by the causes which leM
ttf deficient crops in the north-west of Europe.
These different inferences, whether deduced
from historical or geographical authority^ may be
admitted by the adherents of Mr. Malthus, and
when viewed iri connexion with our present
abundance of subsistence, may be allowed to be of
a nature to relieve a few generations from the ap-
prehension of scarcity ; but the anti-populationists
will still contend that their principle is correct,
and that a time must come when the world will
be exposed to the riiisefy of over population. The
argument is thus brought to a kind of He plus ultra,
but even on this final and decisive ground we are
not afraid to meet our antagonists. Without de-
nying that there is in the womb of time, a period
when population will attain its complement, we
contend that such a period is far mdre distant,
and the intermediate increase of our numbers
likely to be far greater than enters into the con-
236 Population / —
ception of either our opponents, or the public at
large. Nor does it follow that when such a period
shall arrive, it must be necessarily a period of
misery: — but to waive all speculation on this
mysterious point, and to confine ourselves to that
which is of nearer interest, we shall briefly give our
reasons for the opinion that our posterity, for many
generations at least, are likely to increase their
numbers with less difficulty than has been expe-
rienced by us or our ancestors.
1. Our fundamental doctrine, that increase of
produce depends less on the extent of newly culti-
vated soil than on the number of hands employed
on the old, will be found proof against the severest
analysis. It is supported equally by the experience
of the present age, and the general evidence of
history: it constitutes, besides, that fair propor-
tion between demand and supply which corresponds
with the benevolent ordinations of Providence.
2. From the great diversity of soil and climate in
the cultivated portion of the globe, scarcity is never
general : " when famine was in other lands, in the
land of Egypt there was bread." If this apply to
an age when civilization extended over hardly ten
degrees of latitude, how much more does it hold
at present, and how greatly do the advantages aris-
ing from improvement perpetually in progress,
increase the power of mankind to turn to account
the bounty of nature ? Extended communication
by water enables even distant countries to supply
the deficiency of each other ; while in the same
territory improved methods of preserving corn,
additional granaries, augmented capital, all concur
to enable the inhabitants to keep over the surplus
of one year as a provision for the possible failure
of the next.
Acquisition of Subsistence. , 237
3. The labour employed in raising subsistence,
becomes progressively more effectual, the source of
a larger produce, as society advances. This is
evinced in two ways ; one, the use of improved
implements, is obvious to the common observer;
the other, a decrease in the number of agricultur-
ists compared to other classes, is a fact known
only to the statistical inquirer. A population re-
turn in France, or almost any part of the Conti-
nent, still exhibits a larger number of residents in
country than in town, but many of the former are
producers of other articles than food : the flax,
the hemp, the madder of their fields, the wool of
their flocks, the timber of their forests, the hides
of their cattle, are all constituents of supply or in-
gredients of consumption, quite distinct from sub-
sistence. A census of our ancestors, taken a
century and a half ago, would have given, under
the head of agriculturists, above 50 persons in 100,
instead of the 33 of the present day. The majority
of the population of a country are thus enabled to
reside in towns and villages, and are rendered dis-
posable for other purposes : the humbler orders
employ themselves in furnishing, clothing, or lodg-
ing \ a higher class minister to the amusements,
the education, or the luxury of the rich ; while
the highest of all are exempt from the necessity
of following any occupation whatever. Confining
our view to the topic at present under discussion,
how may we consider the majority of those employ-
ed on luxuries ? They may be said to form a re-
serve of capital and labour applicable to the in-
crease of subsistence, in a case of imperious ne-
cessity.
4. As society advances, and a part of the lower
orders participate in the comfort of the middle
238 Population ; —
classes, food forms progressively 31 Less consider-
able proportion of their expenditure. In a popu-
lation like that of Ireland, the chief part of France,
and the poorer counties of England, food consti-
tutes, as already mentioned, about 70 per cent, of
the total family charge ; but in our more populous
rural districts, in our larger villages, and in our
towns generally, the proportion is probably below
60 per cent. What does this imply, but the pos-
session of greater wealth, the power, on the oc-
currence of a scarcity and rise of price, of obtain-
ing subsistence by purchase ; in other words, of
importing it from abroad ? Hence, the less severe
pressure of high prices of food on a population,
such as that of Holland and England, (than on one
devoid, in a manner, of exchangeable commodi-
ties, such as the peasantry of Poland, Russia, or
the inland districts of the Highlands of Scotland.
Prospect of Europe in regard to Population and
Wealth. — " The maxim of the politician," says
Mr. Gray, " ought to be to take care of population,
as population will take care of subsistence and of
every other species of supply." Though convinced
that there is much more truth in this than in most
political apophthegms, we do not go quite so far as
Mr. G., and have no wish to keep in the back
ground the case of a population like that of Ire-
land, Brittany, and Poland, in which increase of
numbers is attended by so slight an increase of
comfort to the individual, or of strength to the
public. Nor do we assert that even in a country
the most fortunately constituted, increase of po-
pulation can bring with it a speedy cure to a dis-
ordered state of productive industry, such as has
existed among us since the peace. In the case,
Prospect of its Increase. 239
for example, of agriculturists, distressed by a su-
perabundance of home growth, little relief is to be
anticipated from increase of consumers, because
the producers can hardly fail to augment their
numbers in an equal proportion, leaving relief to
arise from the extension of home manufacture, the
removal of hands from country to town, or other
causes uncertain in the time of their occurrence,
and distinct, in a great measure, from the general
increase of our numbers.
Next, as to men in office, on whom Mr. G. seems
to think it incumbent to take measures, more or
less direct, to promote population, we confine our
exhortation to a passive course, satisfied if they
do nothing to obstruct the natural increase of
numbers. Let them carefully guard their minds
against the notion which so naturally follows the
creed of limited subsistence ; viz. that the discou-
ragement of marriage, or the loss of lives in the
field, and in unhealthy colonies, are not, in a sta-
tistical sense, a great misfortune, because they
operate, forsooth, as checks to superabundant
numbers. — In regard to population, as to national
wealth, the plain rule is to avoid interference, to
take no step for the purpose of giving a new di-
rection to the course of events, but to remove ob-
stacles wherever such have been interposed by the
mistaken, though well intended intervention of
preceding legislators. As to town population,
with all our conviction of its advantage, both to
the individual and the community, we should in-
finitely regret the adoption of any measure to in-
crease its relative amount. Let the tide flow in
its natural course : the duties of government evi-
dently extend no farther than keeping open the
channel.
240 Population ; —
After these qualifications we may, without being
suspected of exaggeration, be allowed to indulge
a few moments in the prospect opened by the pa-
cific system of the present age, the probable ex-
tension of cultivation throughout Europe ; the at-
tendant increase of population. Our own country,
though less backward than others, offers an ample
field for augmentation of produce by merely car-
rying the improvements of the east and north into
our western counties, and into Ireland. If we
cross the narrow seas and fix our attention on the
districts of the Continent said to be farthest ad-
vanced, such as Flanders, Normandy, or the Pays
de Beauce, we shall find their machinery so rude,
and their work performed in so great a degree by
manual labour, that the productive powers of their
soil might be doubled by the mere application of
the discoveries and inventions that have taken
place among us. If we carry our observation
farther, and calculate how much remains to be
done in the neglected plains of Hungary and Po-
land, in the half irrigated provinces of Spain, Italy,
and even the south of France, the inference is,
that Europe, that boasted seat of cultivation, is
not peopled to the extent of a fifth, we ought rather
to say of a tenth of the numbers, it may be rendered
capable of supporting.
Comparative Prospects of England and France. —
From the prospects of Europe at large, we turn to
those of our own country, and its most powerful
neighbour. To give our parallel a more definite
form, we shall confine our attention to a specific
period : if we go back in our history for a century,
viz. to the reign of George I., we find that since
that time, our population has somewhat more than
Prospect of its Increase. 241
doubled, and that our national wealth may, after
every deduction, be considered as having increased
in a ratio considerably greater than our population.
Without reckoning the public stocks among our
national assets, or dwelling on the augmentation
of our revenue, either as a proof of prosperity or
as a standard of comparison with the last century,
we shall find this estimate of the increase of our
public wealth supported by several very power-
ful arguments ; above all, by the fact that the
principal addition to our numbers has been in
towns, where, as we have just shown, it is most
directly conducive to both individual and national
wealth.
In France, the increase of numbers is as slow iti
towns as in rural districts, and the augmentation
of property probably keeps pace with, but does
not much exceed that of population. This in-
ference seems justified by several reasons ; partly
by the slow increase of the public revenue, more
by the stationary condition of the inhabitants,
many of whom follow the same occupations and
hold the same rank in society as their forefathers
two centuries ago. Now, in comparing our former
situation with that of our continental rival, we
find that in the reign of George L, England, Scot-
land, and Ireland, bore to France, in point of po-
pulation, the proportion of only 45 to 100 (See
Napier's Supplement, heads of " England and
France") ; nor was that of taxable income much
more considerable : at present, in point of num-
bers, we hold the proportion of 70 to 100, and of
taxable income of 100 to 100 ; so much greater
during the last century has been our increase than
that of France. The source of this rapidity, as
far as regards physical causes, is to be sought
R
Population ; —
chiefly in our command of water communication,
and in the productiveness of our mines. As these
causes continue in full operation, or rather are
more effectual at present than at any former time,
we are justified in anticipating a continuance of
superior progress. First, as to population, the in-
crease in France at the rate of 10 per cent, on
the existing numbers (a rate greater than has as
yet been exemplified in that country, but which,
under present circumstances, we are inclined to
consider probable,) will give, in ten years, a re-
sult of 3,000,000
But the increase of Great Britain and
Ireland at 15 per cent., agreeably to the
returns of 1811 and 1821, will give - 3,300,000
Next, as to financial resources : the national
income, by which we mean the aggregate of indi-
vidual income, is, in one sense, somewhat greater
in France than in this country ; but in regard to
the portion of it that is taxable, the advantage
will be found on our side, in consequence, chiefly,
of our greater town population : thus,
Comparative Sketch of National Income expended
on taxed Articles.
France, after
Great Britain
adding 20 pe.
and
France.
cent, for the
Ireland.
greater value
of money.
Rent of land and far-
mer's profit at the
reduced prices of
£
£
£
peace -
50,000,000
60,000,000
72,000,000
Tithe
5,000,000
Rent of houses •
16,000,000
13,000,000
16,000,000,
Prospect of' its Increase.
248
Great Britain
and
Ireland.
France.
France, after
adding 20 w!r
cent, for the
greater val ue
of money.
Income arising from
4
£
a£
commerce, manufac-
tures, and professions,
as far as such are of
50/. and upwards ;
also income from
mines, docks, canals,
tolls, &c.
24,000,000
15,000,000
18,000,000
Small incomes (below
50/.) and wages of all
accustomed to con-
sume taxed articles,
as beer, tea, sugar,
tobacco, in England ;
or wine, cyder, to-
bacco, sugar, coffee,
in France
90,000,000
80,000,000
96,000,000
Together -
185,000,000
202,000,000
Such is the amount
of income arising from
the land and labour of
either country. To this
we now make an addi-
tion of great importance
as a source of taxation,
whatever may be thought
of it as a constituent of
national wealth.
Income from money in
the public funds, or
lent on private se-
curities »
50,000,000
20,000,000
24,000,000
Expenditure of govern*
ment ; viz. the pay of
the army, the navy,
the public offices, the
civil list, the miscel-
laneous services, after
allowing for the late
reductions
18,000,000
18,000,000
21,000,000
Total taxable income *
253,000,000
247,000,000
* Any discrepancies between this column and that in page 249, arise
from the latter exhibiting the returns of Great Britain distinct from
Ireland. R 2
Population ; —
To satisfy those who consider income arising
from public debt, or from the expenditure of go-
vernment as unsuitable appendages to a statement
of national resources, we shall leave both out of
the question, and take the amount of income in
either country without these questionable auxili-
aries. What, under this assumption, is the pros-
pect of increase ? In France, the augmentation
of national income reckoned at 10 per cent, in ten
years, in conformity to the increase of population,
will be about - ^20,000,000
But in this country, the increase,
reckoned also in the ratio of the ad-
dition to our population (15 per cent.)
will produce above - 27,000,000*
Those of our readers to whom this conclusion
appears too flattering may satisfy their doubts by
a consideration of our various advantages, physical
and political, as well as by the practical proof af-
forded during the last hundred years. Were we
to continue the parallel, we should find that even
in population, we shall probably overtake our an-
cient rival, ere another generation pass away.
Meantime, those who know that the issue of a
military struggle depends not so much on popula-
tion as on disposable revenue, will be satisfied that
at present we should have no cause to dread a
contest, single-handed, with that power against
whom our forefathers were obliged to seek safety
in continental alliances. Or, supposing that from
any unforeseen cause, our maritime force should
become less predominant, and that a war between
the two countries were to be decided on shore, we
should have no great reason to dread the result, or
* See this more fully stated in Appendix, (p. 72, 73.)
Prospect of its Increase.
to regard invasion with the alarm which it excited
during the last century.
A similar course of reasoning applies to Russia,
Austria, and other continental powers ; in none is
the degree of increase of national wealth, or as far
as we can learn, of population, on a par with this
country. We have, therefore, little to dread from
attack ; and as we shall certainly not make our su-
periority a source of aggression, the conclusion is,
that our situation presents a solid hope of continued
peace, and of all the advantages arising from the
undisturbed extension of our productive industry.
Such, in regard to foreign policy, are the re-
sults likely to attend on the increase of our popu-
lation. That increase is replete with considerations
equally satisfactory in regard to our internal affairs,
the stability of our finances, the reduction of the
more injurious portion of our taxes — topics of
great interest under present circumstances, and
each of which shall be discussed at some length in
our concluding chapters.
R 3
CHAR VIIL
National Revenue and Capital
HAVING appropriated several chapters to an ex-
amination of the condition of the country, under
the separate heads of Agriculture, Population,
and Poor-rate, we are now to make an attempt of
a more comprehensive nature, and to bestow a
chapter on our National Revenue and Capital
generally. This will lead us to discuss,
The amount of our taxable income.
The connexion between its increase and the
increase of eur population ; and, lastly,
The fluctuations it has experienced in the thirty
years that have elapsed since the French Revolution.
Estimate, by the late Mr. Colquhoun, of Property
created in Great Britain and Ireland, in the
Year 1812.
Agriculture in all its branches (including pas-
ture) - .£217,000,000
Mines and minerals, including coals - - 9,000,000
Manufactures in every branch - 114,000,000
Inland trade - - 31,500,000
Foreign commerce and shipping - 46,000,000
Coasting trade 2,000,000
Fisheries, exclusive of the colonial fisheries of
Newfoundland - - 2,000,000
Chartered and private bankers - 3,500,000
Foreign income remitted 5,000,000
Total - - 430,000,000
National Revenue.
Such was the amount of the property created
in Great Britain and Ireland in 1812 ; since which
there have occurred two very material changes, —
a great increase in the quantity, and a still greater
decrease in the prices. The latter, in the case of
agriculture, amounts to 70 per cent. ; in that of
manufactures to 40 or 50 per cent. ; but as Mr.
Colquhoun's estimate was made greatly below the
currency of the time, 20, or at the utmost 25 per
cent., will form a sufficient deduction from its
amount. To this we find an ample counterpoise
in the increase of quantity arising from
The increase of our population.
The great additional produce on the part of the
hands restored to labour by the peace ; and
The excess of the population of Ireland over
Mr. Colquhoun's, or any preceding estimate.
The result, therefore, is, that even at reduced
prices, the value of the produce of the present
year exceeds that of 1812 ; but as Mr. Colquhoun's
calculation included, under the head of agriculture,
a very large sum for produce, such as oats, hay,
grass, &c. appropriated to the food of horses and
cattle, and as our object is to confine our table to
articles for the consumption of man, or for the 4
purposes of manufacture, we assume the total at
350,000,000/. That sum, then, we consider as
representing the amount of the property annually
created in Great Britain and Ireland ; in other
words, the amount of our annual production.
Of this large sum, what proportion, in this land
of taxes, can be considered as exempt from the
visit of the assessor ? About 80 per cent., as ap-
pears from the calculations in the Appendix,
leaving for our taxable income, about 250,000,000/.
Thus,
R 4
248
National Revenue*
Estimate of the taxable Income of Great Britain,
distinct from Ireland, in 1822.
Rent of land returned in
1814-, at 43,000,000/., and
probably amounting, after
allowing for all deduc-
tions, omissions, and eva-
sions in the returns, to
Add for the extension of rent-
paying land since the
peace - - . .
Together
Deduct for abatements of
rent since the peace,
made, making, or which
must, ere long, be made,
40 per cent. -
Remain
a£48,000,000
2,000,000
50,000,000
20,000,000
^30,000,000
Tithe ; amount in 1812 (see Returns of Property
Tax) 4,700,000/. ; at present computed, after
making an addition for the increase of pro-
duce, and an abatement for the great fall of
Prices 4,000,000
Rental of houses, returned at nearly 16,000,000/.
in 1814; since which, the houses are aug-
mented in number by 15 per cent., an increase
probably balanced by the fall of rents, leaving
the amount as before . 16,000,000
Farming income, which, during the latter years
of the war, was so large as to equal the rental
of the kingdom, but which, in 1821 and 1822,
has been reduced to almost nothing, we esti-
mate, with a view to the future, at the medium
rate of 6 per cent, on 200,000,000^., the sup-
posed amount of capital invested in agriculture 12,000,000
Income from trade and professions, comprising not
only manufacturing and mercantile profits, but
income from mines, docks, canals, tolls, iron-
works ; likewise salaries, as far as derived from
the concerns of individuals ; to the exclusion,
however, of all incomes below 50/. a year.
National Revenue,
This portion of our national revenue, returned
during the war at 30,000,000/., and which,
if augmented in proportion to the increase of
our numbers, should at present be 35,000,000/.,
we compute, in consequence of the change in
the value of money, and the decrease of bu-
siness, at a great reduction, say - - ^22,000,000
Wages and all incomes below 50/. a year, com-
puted on a population, which, (exclusive of
Ireland) is above 14,000,000, but from which
somewhat more than a third is deducted for
persons either above or below the station of
those receiving wages. This large deduction
comprizes not merely paupers, but cottagers
and others whose mode of life is such as to
lead, in a very slight degree, to the consump-
tion of taxed articles. The result, estimated
on a population of 9,000,000 working at the re-
duced wages of peace, but adding the earnings
of women and children to those of the men, is 80,000,000
Interest of our debt, funded and unfunded, since
the reduction of the 5 per cents. - 30,000,000
Conjectural amount of interest from other money
securities; viz. mortgages, private securities
generally ; also public securities, such as bank
stock, East India stock, foreign stock, in short,
all securities distinct from those of our govern-
ment - 20,000,000
Expenditure of government for the army, navy,
civil list, public offices, and miscellaneous
services, after allowing for the late retrench-
ments, and leaving out the proportion expended
in Ireland ..... 16,000,000
230,000,000
Ireland : taxable income computed during the
war at 35,000,0007. ; at present at - - 25,000,000
Total - 255,000,000
Of which, lost to taxation, being expended abroad
by travellers and emigrants - 4,000,000
Remainder - 251,000,000
&50 National Revenue: Connexion between Increase
Increase of National Income since 1792. — After
this statement of our present income, the next
inquiry regards the changes it has undergone
during the last thirty years, a period no less re-
markable for financial than political revolutions.
To form an estimate of the increase of national
income, whether in peace or war, is a matter of
great difficulty : the improvements in our land, our
houses, our furniture ; the additions to our towns,
our harbours, our manufacturing establishments,
in the present age, are obvious, and have been
great beyond example ; but as no record can ex-
press the amount of expenditure incurred, or the
success, necessarily very various, of such invest-
ments of capital, it remains with the inquirer to
seek a standard of computation. For this we are
in some measure prepared by the researches in the
preceding chapters ; and by following up the
reasoning pursued in treating of the successive
effects of war and peace, we shall probably be
enabled to reduce to a systematic form that which
seems at present involved in contradiction. The
cause of the changes since 1792, we are disposed to
seek in —
Fluctuations in the value of money \
Fluctuations in the activity of our productive
industry ;
The increase of population.
The changes in the degree of activity in our
productive industry have been already illustrated
(pp. 30. 40.), at considerable length ; and as to
fluctuations in money, whatever may be wanting
in the preceding chapters shall be supplied in that
on which we are about to enter. At present, there-
fore, we shall confine our attention to the effect of
the third cause, — increase of numbers ; — adopt-
of Population and Increase of Revenue*
ing the principles laid down in our chapter on
Population, and applying, or endeavouring to ap-
ply them, to the circumstances of the present
age.
Connexion between Increase of Numbers and In-
crease of National Income. — This connexion will
be best traced by examining the preceding table
of national income : on looking, for example, at the
important head of wages, we shall at once perceive
that the amount earned has a tendency to in-
crease with the number of the hands employed,
The same holds in regard to professional men, to
merchants, to master manufacturers, in short, in
respect to every line in which income depends on
personal exertion. Thus, land in the hands of the
farmer, like money in that of the merchant, is
productive in proportion to the labour which it is
made to put in motion. The case, it is true, is
somewhat different in regard to a fixed income,
whether derived from real or personal property ;
but even in that, the effect of increasing numbers
is great, producing, as is well known, an increasing
demand for both land and money capital. In proof
of this, we have merely to take, as an example,
the almost daily case of a family becoming nu-
merous ; the consequent repartition of the paternal
property, and the increase of productive power
given to the portion that is put in a state of ac-
tivity.
How, it may be asked, stands the question of
increase of income, in regard to a population of
such primitive habits as the cottagers of Ireland,
or the mountaineers of Scotland, accustomed to
confine their demands to mere subsistence ? In
such a case, an increase of numbers implies a cor-
National Revenue : Connexion between Increase
respondent increase, not of taxable income, but of
the produce which, like potatoes or bread, con-
stitute the mere necessaries of life ; and the result
is an increase rather of gross than of net income
to the nation. By the majority of our population,
however, the value of comfort is understood ; and
the study of the lower, as of the middle classes, is
to transmit to their progeny, however numerous,
a portion of it equal to that which has fallen to
their own lot. Without maintaining that marriages
among the lower orders are contracted with the
requisite prudence, or that the parents of a
numerous family can avoid a long and serious
struggle, the fact is, that augmentation of number
is not generally found to involve a descent in the
scale of society ; nor has the surprising increase
of our population in the present age, (Chapter on
Poor-rate, p. 195.) raised the proportion of our pau-
pers to our total numbers much beyond what it was
a century ago. It is the characteristic of a civilized
and industrious society, like the inhabitants of
Holland, England, or Scotland, to make successive
discoveries in the means both of augmenting pro-
duce and diminishing expense ; improvements by
which, whether effected in agriculture, manufac-
ture, navigation, or trade, a country is enabled to
support many more inhabitants in equal comfort.
Increase of numbers is conducive, therefore, to
increase, not merely of produce, but of taxable in-
come. We have already had occasion to show
what large sums are annually brought into the
exchequer by the duties on beer, spirits, tobacco,
groceries ; all articles which enter into the con-
sumption of our labouring classes, particularly
when resident in towns. But the general truth of
of Population and Increase of Revenue. 253
our reasoning will appear more clearly, if we have
recourse to arithmetical statement, and if we sub-
ject to an analysis the 250,000,000/. constituting
the taxable income of the nation. This will give
the following proportions :
Arising from wages, and, of course, directly
affected by increase of population - - £100,000,000
From capital and labour combined, a portion
of national income, which also is much in-
creased by increase of population ' 50,000,000
From rent of land, houses, or interest of
money, which are influenced, though in-
directly, and in an inferior degree, by the
increase of numbers - 100,000,000
Total, including Ireland 250,000,000
These arguments will readily be accounted ap-
plicable in a general sense, arid for ordinary times ;
but what shall furnish a rule for computing
national income in so fluctuating a period as that
through whicli we have passed since 1792 ? The
question is certainly very complicated, and seems
at first to admit of no clear solution ; for while
a calculator who should have formed an estimate
ten or twelve years ago could hardly have failed
to pronounce the war highly favourable to the in-
crease of our national wealth (our debt forming
apparently no counterpoise to the increase of our
resources), a statement prepared since our years
of distress would convey a very different result.
In France, the Revolution has been styled, the
" queen of all earthly reverses ;" but we might
almost hazard an opinion that the effect of that
convulsion, viewed in regard to change of property
and in all the extent of its duration (now thirty
years), has been as great in this country as in that
National Revenue : Connexion between Increase
which gave it birth. Among our neighbours, the
change was more sudden, directed more against
a particular class, and bringing with it, too often,
the melancholy concomitant of loss of life ; but
with us it has been more comprehensive, for an
alteration in the value of money comes home to
every class and condition. If in France, govern-
ment annuitants suffered during the war a much
greater reduction than in this country, there is no
comparison in regard to the fluctuation in the cir-
cumstances of the more numerous class of farmers,
whether we look to their prosperity during the
war or their embarrassment since the peace.
But amidst all these changes in individual
property, is it practicable to discover any rules of
general application, any data on which to found
a comparison of the circumstances of the public of
the present day with those of the public of 1806 or
1792 ? In a community so great and so varied as
the population of these kingdoms, the ease of one
part is often cotemporary with the embarrassment
of another; and there prevails, in the general result,
an approach to uniformity which would hardly
be credited by those who, in drawing their in.
ferences, allow themselves to be forcibly struck
by the fluctuation of particular classes. It was
thus that our revenue stood its ground during all
the trials of the war and the no less trying inter-
val that has followed : it is thus, also, that the
amount of our exports and imports has con-
tinued to bear a proportion to two regulating cir-
cumstances (the value of money and the extent
of our population), amid all the anomalies intro-
duced by restrictions, prohibitions, licences. The
political arithmetician is therefore, in some mea-
of Population and Increase of Revenue. 255
sure, justified in forming a conclusion, which, with-
out this collateral support, might appear vague
and untenable ; viz. " That though the circum-
stances of individuals, separately, are so much
altered since 1?92, those of any given number,
whether 100, 1000, or 10,000, are more nearly on
a par than is generally supposed." But as the
stationary character by no means holds in regard
to our population, as the 10,000,000 forming the
population of Great Britain in 1792, have now
become 14,500,000, it will follow from our rule
that the increase of national revenue is in the
proportion of 45 per cent, since 1792, such being
the ratio of increase in our numbers.
For an inference of such importance, argu-
ments can hardly be too much multiplied or too
minutely specified. We refer our readers accord-
ingly, in the first place, to the preceding reasoning
(pp.252, 3.) ; next, to the arguments (pp. 227, 8, 9.)
in our chapter on population ; and in the third
place, to truths which are in a great measure
within their personal observation, such as, that
amidst all the increase of our number, and all the
revolutions in the circumstances of individuals
since 1792, there will be found no decrease in the
proportion of the middle and upper classes to the
lower. Farther, there seems no reason to doubt
that, however the numbers of the next generation
may be augmented, a correspondence with the
past, in point of both rank and property, will, in a
general view, be kept up. Nor is the cause difficult
of explanation ; the necessity of providing for a
family is the strongest of all stimulants to the re-
nunciation of indolent habits, to the productive
employment of time and capital. What a contrast
256 National Revenue : Connexion between Increase
in the result of the labour of the parent who
necessarily adheres to a uniform pursuit, and of him
who, exempt from the calls of a family, is at
liberty to pass his time in speculation, indecision,
and change ! In nothing is the advantage of a
mercantile community, like England, Holland, or
the United States of America, more conspicuous
over most countries of the Continent of Europe ;
where the gentry, or, as they are styled, the
noblesse, so frequently pass their lives without a
definite object, and escape poverty only by avoid-
ing the responsibility of a family.
But are we, it may be said, authorized to assume
an equality in individual income between 1792,
a season of tranquillity, and the present, which is
one of general embarrassment ? To this argument,
unluckily of great weight, we oppose one of equal,
or almost equal power ; viz. the great comparative
increase of our town-population, the extent of
which, as income increases so much more in town
than in the country (Chapter on Population, p. 232.)
would have justified us, had our present circum-
stances been as tranquil and secure as in 1792, in
assuming an increase of national property con-
siderably beyond that of the 45 per cent, indicated
by our numbers.
After this statement of our arguments, ,we shall
proceed to their practical application, and exhibit
a computation of our national income at different
dates since 1792 ; forming it less from direct docu-
ments, which in fact are not to be found, than
from the probabilities suggested by our population
and property- tax returns.
of Population and Inci*ease of Revenue. 257
Conjectural Amount of our National Revenue or
taxable Income at different periods from 179%
to
Great Britain distinct from
Ireland.
In 1792, our taxable income
appears to have been as
stated in p. 39, about
In 1806 : increase calculated
in the ratio of the increase
of our population, 18 per
cent, in 14 years
Together
Probable addition from the
higher wages and higher
profits of a state of war
Total of taxable income
in 1806
In 1813 and 1814- : Increase
of national income since
1806, calulated in the
ratio of the increase of
population, 1 1 per cent. ;
thus : —
National income in 1806, as
above ....
Add 11 per cent.
Together
Probable addition from the
higher wages and higher
profits of a state of war
Total of taxable income in
1813 and 1814
Great Britain and Ireland.
1822. Increase of taxable
income in the ratio of the
population, 13 per cent,
since 1814; thus: —
Amount in 1814
Add 1 3 per cent.
Add farther the taxable
income of Ireland
25,000,000/. equal in
money of 1792 to -
Total of our taxable income in
1822, (in money of 1792)
Money of 1792. Totals, also in Mo-
ney of 1792.
£125,000,000
22,500,000
147,500,000
22,500,000
147,500,000
16,500,000
164,000,000
24,000,000
164,000,000
21,000,000
21,000,000
170,000,000
188,000,000
206,000,000
National Revenue : Connexion between Increase
These results, which we present chiefly as ap-
proximations, convey a clear idea of the effect of
increasing population on national income. The
next point is, the difference of numerical amount
produced by the rise or fall in the value of money.
Money of 1972. Money of subsequent
years.
£125,000,000
170,000,000
Great Britain distinct from
Ireland.
1792: Taxable income as
per preceding table
1806: Do. per do.
After the general rise of
prices that took place be-
tween 1792 and 1806,
170,000,000^. in money of
1792, was, in the money
transactions of 1806,
equivalent to 220,000,000
And an actual return of our
national revenue or taxable
income in the currency of
1 806, would probably have
givenasumof220,000,000/.
1813 and 1814 : Taxable in-
come as in last page 1 88,000,000
Equal, at a rise of prices of
60 per cent, since 1792, in
all money transactions in
1813 and 181 4-, to 300,000,000
Great Britain and Ireland.
1822. Taxable income as
in last page - 206,000,000
The calculation in regard to
the value of money is now
reversed, prices having
fallen, or, in other words,
money having risen in value
between 1814 and 1822,
nearly 4-0 per cent. Still
it is about 20 per cent.
lower than in 1792, so that
the last mentioned sum
(206, 000,0007. money of
1792), is equal in the cur-
rency of 1822, to - 247,000,000
A sum corresponding nearly
with the amount of the
table of taxable income
contained in p. 249.
of Population and Increase of Revenue.
Our next object is to introduce our burdens
into this comparative table, and to calculate their
proportion at different periods to our revenue.
Statement of our public burdens and national
revenue, calculated for distinct periods. The
public burdens include taxes (before deducting
the expence of collection), poor-rate, and tithe.
Great Britain distinct from Ireland.
Years.
Public Burdens.
Our National Re-
venue or Taxable
Income.
Proportion of Bur-
den to Revenue.
1792
1806
1814
£22,000,000
60,000,000
80,000,000
£125,000,000
221,000,000
300,000,000
nearly 18 to 100
27 to 100
27 to 100
Great Britain and Ireland, (see Appendix, p. 84.)
1822 70,000,000 250,000,000 28tolOO
The sums inserted above, as forming the na-
tional revenue in 1806 and 1814, are specified in
a preceding chapter, (page 40.) but there being
considerable intricacy in the estimate, in conse-
quence of the fluctuation in the value of money,
we subjoin a comparative statement of our public
burdens and national revenue reduced to a common
standard, viz. the money of 1792.
Great Britain distinct from Ireland.
Years.
Public Bur-
dens, in Money
of 1792.
Our National Re-
venue or Taxable
Income in Money
of 1792.
Proportion of Bur-
dens to Revenue.
1792
1806
1814
^22,000,000
46,000,000
50,000,000
a£l 25,000,000
170,000,000
188,000,000
nearly 18 to 100
27 to 100
27 to 100
Great Britain and Ireland, (see Appendix,)
18*2 ^OOOOnoiGreatBritain 185,000,000) 2
322 58,000,00 0|lreland . _ 21 , 000,000 / J8to]
260 National Revenue.
The reduction to a common standard is useful
in several respects, correcting the exaggerated es-
timate, which, during the war, we were accustomed
to make of both our burdens and our resources,
while, in regard to the present time, it exhibits
the remarkable and unwelcome truth, that our
taxation though reduced numerically (by the re-
peal of the Property and other taxes), is greater
in its actual amount than during the war.
Nothing can show more strongly the importance
of the discussion on which we are now to enter,
viz. whether the measures that form the subject of
the succeeding chapters are calculated to afford us
substantial relief.
CHAP. IX.
Fluctuation in the Value of Money or in the Price of
Commodities.
THE fluctuation in prices consequent on the great
political transitions of the age, has been already
discussed in our second chapter : at present our
object is to pursue the same inquiry on a more
comprehensive plan, referring to changes that have
taken place in former ages, and explaining the in-
jury likely to arise from their recurrence. The
subject naturally divides itself into the following
heads : —
The tendency of prices to fluctuate.
Impracticability of foreseeing or preventing
such fluctuation.
Plan for lessening its injurious operation.
Effect of such a plan on agriculture, on the
funds, on time contracts generally.
Tracts published on this Subject. — The changes
in the price of commodities, or, in other words,
in the power of the precious metals to purchase
them, form one of the most interesting inquiries
in political economy. To the reader of history,
a knowledge of such changes is indispensable to
the formation of a correct estimate of the price of
labour, of the public revenue, and of the compara-
tive wealth of a nation at different periods ; while,
in a practical view, it is of very serious interest
as connected with the future value of bequests,
leases, and time contracts generally. But the
s 3
Fluctuation in the Value of Money.
documents required for forming an estimate of
these changes, are as yet far from satisfactory,
the subject never having engaged the attention of
government, and but lately that of any of our
public bodies. In France, a country little re-
marked for statistical research, the attempts
hitherto made to compare the rate of prices at dif-
ferent periods have been confined to a few literary
men : in England, one of the earliest, was that of
Bishop Fleetwood, who collected prices of wheat
during a number of years from the 13th to the
J7th century, and reduced them to money of Olir
present standard. His labours, published in 17^7*
formed the chief materials for the reasonings of
Di*. Smith, \Vhose life was riot prolonged until the
publication (in 1797) of a very valuable addition
to such collections by Sir Frederick Eden, ill his
work on the " State of the Poor," the copious ma-
terials of which have been termed a fon$ perennis
for succeeding inquirers.
In 1798 there appeared in the Transactions of the
Royal Society, a tabular statement by Sir George
Shuckburgh, which, from the clearness of its form
(See Appendix), and the confidence of its deduc-
tions, obtained much more credit than it deserved,
being far from correct, even in the fundamental
points. In 1811, the late Arthur Young, alarmed
at the impression made on the public by the Report
of the Bullion Committee, and dreading a con-
traction of paper currency attended by a fall in the
price of agricultural produce, entered into re-
searches of great extent, both as to the past and
current prices of commodities, and published the
whole in a pamphlet entitled <c An Inquiry into
the Progressive Value of Money in England."
This tract, however inaccurate in a theoretical
Fluctuation in the Value of ' Money. 263
sense, has a claim to attention, as well for the
value of its materials, as for a correction of the
mistakes of Sir George Shuckburgh. Since the
time of its publication, serious beyond example
as has been the fluctuation of our prices, there
lias appeared no treatise of consequence on the
subject.
Historical Sketch of the Fluctuation of Prices. —
It is a common idea that the money prices of com-
modities have been progressively rising since the
Norman Conquest, or even since the prior period,
when the luxury of Rome, and the revenue paid to it
by tributary provinces, disappeared before its rude
invaders from the north and east. To this opinion,
however, there are several strong objections. The
supply of gold and silver from the mines, was,
during the middle ages, scanty arid precarious ;
while the numbers of the society requiring the use
of the precious metals, in other words, the popu-
lation of the west and central part of Europe, were,
in some degree, in a state of increase. Dr. Smith,
reasoning on the price of commodities generally,
from the price of corn, and founding his view of
the latter on the collections of Bishop Fleetwood,
assumes, that from the year 1200 to 1550, there
was no considerable rise of prices ; and that such
rise did not begin till the reign of Elizabeth, the
time when the American mines became productive
on a large scale. The import from that quarter,
small as it would appear in the present age, was
sensibly felt at a time when silver was very little
used in manufacture, and not largely in plate i its
amount was, under such circumstances, almost
wholly added to the circulating medium of Europe.
This addition was considered by Dr. Smith the
s 4
Fluctuation in the Value of Money.
main cause of the rise of prices which continued
until the year 1650, when, from circumstances on
which we shall enlarge presently, a suspension of
rise took place, and prices became either stationary
or declining. This state of things lasted until
1764, when, as is well known, a new aera com-
menced and continued until 1814.
Effect of a State of War.— Dr. Smith's view
of the progressive value of money is admitted
by Mr. Young, but neither of these writers has
thought of tracing a correspondence between the
fluctuations in the precious metals in the 16th and
17th centuries, and the political transactions of
Europe. A state of war tends, as we have shown
in a preceding chapter, greatly to advance prices,
and the rise in the reign of Elizabeth may, in no
inconsiderable degree, be ascribed to the increase
of military establishments in that age, to our de-
fensive attitude against Philip II., to the obstinate
contest carried on between him and his insurgent
subjects in the Netherlands, to the civil wars of
France, and to the troubled state of Germany.
On the other hand, after the treaty of Westphalia
the chief part of Europe enjoyed tranquillity,
and the effect on trade and agriculture, of reduced
armies and diminished taxes, is described by Sir
W. Temple, in a manner that strikingly resembles
the state of this country and the Continent since
the late peace. This accounts for the decline of
prices that prevailed after 1650, but the applica-
tion of our theory is not so clear after 1672, when
war was renewed on a great scale, and continued,
with comparatively little intermission, during forty
years. Add to this, that there took place, during
all that time, an import of specie from America
to an extent somewhat increased; viz. to the amount
Fluctuation in the Value of Money. 265
of three, four, or five millions, annually. In
what manner, under the operation of this double
cause of enhancement, are we to account for
prices experiencing no great or permanent rise ?
Perhaps by the following considerations : —
1. An increased use of the precious metals, in
plate, manufactures, and ornaments, in conse-
quence of the general increase of wealth.
2. An augmented export of them to the
eastern world, chiefly through the means of the
Dutch East India Company.
3. The fact, that previous to 1672, the supply
of agricultural produce in England, as in the north
west of Europe, generally, had become somewhat
more than equal to the consumption ; a dispropor-
tion, of which the effects are generally felt for a
long series of years.
The peace of Utrecht was the commencement
of a period of general tranquillity ; government
expenditure was reduced, labourers were restored
to agriculture, and the decline of prices became
general and progressive. In vain did our land-
holders look to the bounty on the export of corn,
for a counteraction of the fall in the market : they
exported largely, and received premiums on a
liberal scale, but their abundant growth kept down
the home market, and the excess of supply over
consumption continued during half a century, ter-
minating only in 1764. Nor is it at all probable
that it would have ceased at that time, peace hav-
ing been but lately concluded, had we not had a
succession of indifferent seasons : these raised
prices, and the contest that ensued with our colo-
nies, prevented their fall.
After 1788, the restoration of peace tended,
naturally, to reduce prices, but its effect was re-
266 Fluctuation in the Value of Money.
tarded by several causes, in particular, the de-
mand of hands for our manufactures, and the oc-
casional occurrence of indifferent seasons. After
1792, the progress of enhancement was accelerated
in an unexampled degree by the general state of
war consequent in the French revolution. A rise
of prices progressive during twenty years, and
amounting at last to more than 60 per cent, above
those of 1792, overturned time contracts through-
out the kingdom, depressing annuitants while it
raised tenants on lease, with various other classes,
above their former station, — an elevation, unfor-
tunately, of short duration, since they have been
made to descend from it with still more rapidity in
the years that have followed the peace.
Can such Fluctuations be foreseen or prevented? —
After this summary of the principal facts in regard
to the fluctuation of prices, the next and still more
important point is to ascertain how far such fluc-
tuations are likely to continue. But here the most
indefatigable inquirer will find the result uncertain,
and be obliged to admit, that in so complicated a
question, all that we can do with confidence, is to
state the arguments on either side. Those in fa-
vour of the rise of commodities, are,
The contingency of war.
The probable increase of the produce of the
mines, from the application of steam-engines and
other improved machinery.
The farther substitution of bank paper for me-
tallic currency ; a substitution, which, in its ge-
neral (though not in its local) effect, operates like
the increased productiveness of a mine.*
* Our mention of bank paper must always be understood as
of bank notes payable in cash : a resort to non-convertible paper
Fluctuation in the Value of Money. 267
On the other hand, the arguments for the fall
of pricesr ae equally substantial ; viz.
The tendency of all improvements in productive
industry, whether in agriculture, manufacture,
mechanics, or navigation, to produce cheapness.
The increasing demand for the precious metals,
from the increasing population of the civilized
world.
As to England in particular, the tendency of a
country where prices are higher than in the neigh-
bouring states, to approximate by commercial in-
tercourse to the standard of other countries.
Supply of Specie from the Mines. — The amount
of specie extracted annually from American mines,
was computed in 1760, at 6,000,0007. sterling : in
the course of the succeeding twenty years, it had
increased to fully 7,000,0007., and soirie time after
(Appendix to the Bullion iteport of 1810.) to
8,000,0007. In this, as in other respects, Mexico
is by far the foremost of the Spanish colonies, the
yearly produce of her mines being nearly five mil-
lions sterling, while that of the rest of Spanish
America may be estimated at three millions more.
Adding to thes6, somewhat less than a million
sterling for Portuguese America, and somewhat
more than another million for the mines of our
own hemisphere, we make a total of nearly ten
millions annually added to the stock of the precious
metals throughout the world. From this, however,
is to be made, both at present and for some time
back, a deduction on account of the political
troubles of Spanish America : still the importation
will, we take for granted, be henceforth excluded from oui-
financial creed.
268 Fluctuation in the Value of Money.
is on a large scale, and would speedily produce
depreciation, were not the demands of the civilized
world on the increase.
Consumption of Specie. — The demands for the
produce of the mines, arise from various causes,
of which the greatest, by far, is the annual con-
sumption for plate, watches, gilding, and orna-
mental manufaqture, generally. The amount of
this admits of no satisfactory calculation, but is
probably (Appendix, p. 89.) not far short of two-
thirds of the total procjuce of the mines. Next
comes the demand for coin : the currency of al-
most all the Continent of Europe is metallic, and
an annual supply is requisite, partly to make good
accidental loss or the effect of wear, partly to meet
the increase of population. This, though not
large, may, when joined to the annual export of
specie' to India and China, (to say little of losses
arising from shipwreck or hoarding) account for
the absorption of the remaining third of the pro-
duce of the mines. What then appears to be the
general result ? That in ordinary times these va-
rious sources of demand are equal, or nearly equal,
to the amount supplied from the mines ; but that
for some years back (since 1818), they appear to
have been more than equal, in consequence of the
extra-demand for gold on the part of the banks of
this country, Russia, and Austria, for the purpose
of substituting a metallic for a paper currency.
Dr. Smith, in adverting to the future supply of
specie from the mines, considered it an equal
chance that old mines may become exhausted, as
that new mines may be discovered, or the produce
of the old increased. Without contesting the ac-
curacy of this opinion in his age, it will hardly be
doubted, that since the discovery of the powers of
Fluctuation in the Value of Money. 269
steam, the application of improved machinery to
the existing mines, would be productive of a very
considerable extension of produce ; but whether,
or in what time, it will be carried so far as to lower
materially the value of specie, it appears in vain
to conjecture.
Circulation of Bank Paper. — Our countrymen,
accustomed during more than half a century to
the use of bank notes, have observed, with some
surprise, that a currency so cheap, and apparently
so easy of introduction, should, as yet, be hardly
known on the Continent. The bank of France,
though of undoubted stability, has found it practi-
cable to establish branches in a few only of the pro-
vincial towns : several, containing a population of
40,000 and upwards, are still without suchbranches ;
and there is not a private bank of circulation in
the whole country. The causes are, the distrust
excited by the recollection of the assignats, the
want of confidence in government, the absence of
commercial enterprize, as well as of the habits of
care and arrangement, which are indispensable to
success in a line of itself less profitable than is com-
monly imagined. Holland, with all her com-
mercial improvements, has never adopted the bank-
note system, while in Austria, Russia, and Sweden,
the paper circulated is a forced government cur-
rency, not convertible into cash.
The obstacles to the circulation of bank paper
on the Continent, would probably have yielded to
the effects of peace and augmented trade : but
they appear to have received of late years, a con-
firmation in the increased facility of forgery ; and
it would thus be vain to calculate on the extended
use of bank paper, or on any effect likely to arise
270 Fluctuation in the Value of Money.
from it in regard to the value of the precious
metals.
Supply of Agricultural Produce. — Though corn
is so liable to fluctuation, as well from difference
of seasons, as from the occurrence of peace or
war, it is remarkable that a character of rise or fall
when once stamped on a period, is found to pre-
vail during a considerable time. Thus, the rise
of price begun in the early part of the reign of
Elizabeth, continued, with only occasional inter-
missions, to 1650, not far short of a hundred
years, At that time began an sera of stationary,
and, in some degree, of decreasing prices, which,
with temporary suspensions during the indifferent
seasons and expensive wars of the reigns of Wil-
liam and Anne, continued until 1764. From that
year until 1814, we had no less than fifty years
of brisk demand and high prices ; while at present,
as far as can be judged from appearances, either in
England or on the Continent, we are entering on
a period similar to that which followed 1650 or
1713, — a period when our growth being somewhat
more than adequate to the demand, the market
long continued heavy, and prices, in a great mea-
sure, stationary.
In what circumstances are we to look for the cause
of a stagnation continuing during so long a period
as half a century ? In the investment of capital
and labour in agriculture, to an extent productive
of a surplus growth ; and in the fact, that, as in
the natural course of things, the producers increase
in the same proportion as the consumers, the dis-
proportion continues, year after year, until the oc-
currence of some great national change, such as a
war, or the direction of an extra portion of labour
to manufactures.
Fluctuation in the Value of Money. 271
To return to the more immediate object of our
enquiry — the effect of the cost of corn on prices
generally. This effect is of the greatest import-
ance, both as corn is the chief object of family con-
sumption, and as it regulates, in a great measure,
that other main constituent of prices, the rate of
labour. At present, the operation of the corn
market is altogether to reduce prices, at least to
confirm the reduction that has taken place. Nor
is this at present likely to alter the effect of our
taxes on agricultural expenditure, is, as we have
shewn in a preceding chapter, considerably over-
rated, and the charges of tillage bid fair to return
to a standard little higher than that of 1792. Such
is also the prospect in France and the Continent
at large ; a settled state of peace reducing the cost
of labour, and preventing, in consequence, any
permanent rise of prices in the corn market.
Effect of Continental Prices on those of England.
— In the case of two countries enjoying peace and
the benefit of commercial intercourse, there is a
perpetual tendency to equality of price. The rea-
sons are obvious ; there exists a direct motive
for emigrating from the dearer country, and for
making in the cheaper, articles for clandestine im-
portation into the dearer. In the latter, the rate
of interest is generally lower, and affords a temp-
tation to send out of it funded and other monied
property. The operation of these causes, steady,
though almost unseen, has been a main reason of
the fall in our prices since 1814.
War ; Mode of its Operation. — Of the effect
of war there can be no doubt ; it enhances com-
modities in various ways : — First, by the addition
Fhictuation in the Value of Money.
of a tax to the price of an article ; next by a gene-
ral rise in labour from the demand for men for
government service, whether in the field or in the
preparation of clothes, arms, and other warlike
stores ; and, lastly, by the interruption of interna-
tional intercourse,- and the increased charge of
transport. If these causes had a serious operation
on prices in the 16th and 17th centuries, their ef-
fect has been greatly increased by the adoption of
the funding system, since which, the scale of mili-
tary expenditure has been enlarged in every coun-
try of Europe.
What, in this respect, was the situation of
France during the reign of Bonaparte ? His un-
settled government and personal want of credit,
discouraged loans, and prevented one great source
of expenditure ; nor was his power displayed with
much effect in the imposition of additional taxes.
But the demand of men for his service, was on a
large scale, and, without the operation of either
paper-currency or war taxes, prices in France rose
between 1792 and 1814, fully 30 per cent. From
this important fact we may form some idea of the
effect of a new war on the prices of commodities in
England, without supposing a repetition of ex-
treme measures, such as an exemption from cash
payments, or the stoppage of neutral navigation.
Even in a mitigated form, the effect of war on
prices is so decisive as to counteract, in the course
of a few years, the operation of almost all the
causes of reduction. On this, however, we for-
bear to dwell, because a recurrence to a state of
hostility, to that state which subverts the calcula-
tions of the governor, as it destroys the happiness
of the governed, will be less and less frequent, as
sovereigns become aware of the barren glories of
Fluctuation in the Value of Money. 2T/S
the field, of the substantial advantages of continued
peace.
The arguments for the rise, as for the fall of
prices, are thus of great weight, and no question,
it is evident, can be more complicated, or present
a longer catalogue of opposing causes. On the
one hand, what a prospect of fall is held out by
the application of improved machinery to the
American mines, and the introduction of bank
paper on the Continent of Europe ! On the other,
what a counterpoise from the prospect of increased
population or the recurrence of a state of war ! To
attempt to strike a balance between these contend-
ing causes, to advance an opinion in regard to fu-
ture probability, would be vain : all we can pro-
nounce, is, that fluctuation in the value of money
cannot be prevented ; that it can hardly fail to re-
cur again on any great political transition; and
that a measure which should put an end to uncer-
tainty in time contracts, would relieve us from a
great national evil.
Injurious Effect of Fluctuation. — Money, as
Dr. Smith remarks, (Book I. Chap. V.) is an un-
exceptionable measure of value in buying and sell-
ing; and it is, in general, a safe measure in a
contract from year to year ; but in a contract of
long duration the case is far otherwise. How
great was its depreciation during the war ; and not-
withstanding the various disadvantages attendant
on landed property, how general was the prefer-
ence given to it in th^case of a provision for a
young family, for grand-children or for any remote
object. Is it not in the unfortunate tendency of
money property to fluctuate, rather than in any dis-
Fluctuation in the Value of Money.
trust of the stability of the public funds, that we
are to look for the cause of stock selling for 6, 7,
or 8 years' purchase less than land ? Then, as to
land itself, and the mode of letting it, can we trace
among the various objections to long leases any
so powerful as the uncertainty of the value of mo-
ney? Lastly, amidst all the difficulties in the
question of a commutation for tithe, what operates
so directly to prevent the church from acceding to
a fixed money income, from reducing to a deter-
minate form, that which, in its present unsettled
state, leaves open so wide a field for contention ?
The Situation of Annuitants. — We have already
explained in our second chapter, that the fluctua-
tions in the price of land and houses during the
war, were, in a great measure, nominal ; that it
was, in general, money that changed, and com-
modities that maintained their value. This main-
tenance of value was exemplified in many other
respects ; in income derived from personal ex-
ertion, whether in the shape of wages, salaries, or
professional fees, the whole exhibiting a tendency
in the transactions of life, to find their level, and
to counterbalance all artificial changes, whether
arising from additional taxes, the non-convertibility
of paper-currency, or the restriction of national in-
tercourse. But from the benefit of this tendency
to equality, the fixed annuitants are excluded ;
they alone are unable to guard against a progres-
sive decline of income during a war ; and the in-
crease of income which they may receive, as at
present, at a peace, will hardly prove an indem-
nity to them if it bear too hard on the solvency of
their debtors. Are we not, therefore, justified in
inferring, that the case of the annuitant, as it
Fluctuation in tlie Value of Money. 27$
stands at present, is unnatural, and at variance
with the rules of equity ; and may we not con-
clude that by conferring on money income, the
stability attendant on income derived from labour
or real property, we shall correct an essential de-
fect in our institutions ?
With the importance of such a provision, we
shall be more strongly impressed after calculating
the amount of money-property in the kingdom,—
the property that would be beneficially affected, or
relieved from uncertainty of value, by the adop-
tion of such a measure. In former ages, when the
funding system was unknown, and loans of money
from one individual to another, were of very limit-
ed extent, land, houses, furniture, implements and
clothing, comprised almost every description of
property : they constituted " the moveables and
immoveables" of our ancient statutes. But
within the last century, there has arisen in the
public funds, in canals, docks, and other under-
takings, held in shares, as well as in private loans,
(on mortgages and otherwise), a property repre-
sented solely in money , of which the aggregate ap-
proaches to two-fifths of the total wealth of the
kingdom.
Thus, were we to compute the land, the houses,
the farming, the manufacturing, the mercantile
stock of Great Britain andlreland at 2,000,000,000/.
see Appendix, p. 82.), we should not be disposed
to rate our public funds, the amount of loans ex-
isting between individuals, the value of shares in
public works, in short, all property of which the va-
lue is directly affected by the rise or fall of money,
at less than 1, 200,000, OOO/. Though of this sum
the greater part can hardly be called an addition
to the national property, the whole is evidently
276 Plan for giving a steady Value
individual property ; and its amount is demon-
strative of the magnitude of that income, which
is most affected by fluctuation of prices.
Plan for lessening the Injury arising from the Fluc-
tuation of Prices.
If we proceed to analyze the use of money,
whether for national or individual purposes,
we shall find it resolve itself into the power of
purchase, or, in other words, into the power of
procuring articles for consumption. It is conse-
quently of much more importance in all contracts
of duration to look to the value than the numerical
amount of a given sum. The expediency of this
has long been felt, and the price of corn recom-
mended as a standard of reference and regulation.
Such it, in some measure, may be in a country
like France, where the majority of the lower
orders are strangers to the use of foreign articles,
such as groceries, and expend literally three-fouths
of their wages on bread. It is farther suitable in
that country in an indirect sense, from its influence
on the price of labour, as manual labour is there
made to perform much more in agriculture, and
even in manufactures, than with us. The case of
France is that of the Continent at large, and was
that of our ancestors a century ago, but circum-
stances are now much altered, our consumption
of corn having undergone a comparative reduc-
tion, while manual labour is far less than formerly
a constituent of price in our manufactures*
Hence, the expediency of giving not only to our
produce, but to our imported and our manufac-
tured articles, a direct weight in the scale of cal-
culation.
That corn enters iu a very different proportion
to Money Contracts. 277
into the expenditure of different classes, will be
apparent from a short comparative sketch.
Heads of Expenditure.
(See Appendix, p. 93.)
Family of a Cotta-
ger ; Expence
about £37 a Year.
Proportions in 100.
die Class, residing
in a Provincial
Town, Expence
£370 a Year.
Proportions in 100.
Provisions -
74
33
Clothing and Washing
13
18
House-rent -
4$
10
Fuel and Light
7
6
Other charges, namely,
Wages, Assessed Taxes,
Education, Medical At-
tendance, &c.
li
33
100
100
This sketch, brief as it is, puts in a very clear
light the difference between the wants of the lower
and those of the middle and upper classes. The
head of wages has, of course, no place in the ex-
penditure of the poor : the price of butcher
meat is of much less consequence to them than to
their superiors ; the price of corn of much more.
A Table of Reference. — To the middle and upper
classes, corn is evidently ineligible as a standard of
value. It forms in a direct sense, hardly a third
of their expenditure, and though, on making al-
lowance for its indirect operation, in particular
for its effect on wages, we become more aware of
its importance, and more disposed to lend an
assent to the doctrine of Dr. Smith, who assumed
labour as the measure of value, and corn as the
measure of labour, it will hardly be denied, that
in an age of such varied and refined expenditure,
a standard of a more comprehensive character,
ought if possible to be adopted. Now, the pro-
gress of statistics, and the multiplication of official
T 3
#78 Plan for giving a steady Value
returns within the last half-century, have supplied
data in a great measure unknown to Dr. Smith,
and have suggested to us the practicability of
framing a standard from materials, which in his
time might not have appeared reducible to a de-
finite form. Of this, some idea may be formed
from a table in the Appendix (p. 95.) comprising
a list of articles of general consumption, corn,
butcher-meat, manufactures, tropical products, &c.
and containing the probable amount of money ex-
pended on each by the public. This table is followed
by explanatory remarks, in particular by a notice of
the alterations that ought to be made in it periodi-
cally, to render the result exhibited by it conform-
able to the fluctuations of our market. Aware, how-
ever, of the uncertainty of statistical calculations,
when unsupported by official returns \ aware, also,
that to give to a table the authority requisite for
such a document, must be a work of much time
and labour, we decline inserting it in the text, and
confine ourselves to an anxious recommendation
of the principle ; to an explanation of the benefits
that would arise from the adoption of such a
standard.
What, it may be asked, would be the conse-
quence of our possessing a table such as we have
supposed ? The ascertaining on grounds that
would admit of no doubt or dispute, the power
in purchase of any given sum in one year, com-
pared to its power of purchase in another. And
what would be the practical application of this
knowledge ? The correction of a long list of anoma-
lies in regard to rents, salaries, wages, &c., arising
out of the unfortunate fluctuations of our currency.
In the present undefined form of leases, annuities,
and other time contracts, the 100/. of this year
may, three years hence, be equivalent in power of
to Money Contracts. 279
purchase, either to HO/, or to 90/., the former
being probable, if peace continue, while the latter
is a moderate estimate of the change that would
follow the first year of a war. So much are the
chances on the side of fluctuation, that it may
almost be said, that an " adherence to a fixed
sum of money implies an acquiescence under a
change of value." But a table exhibiting from
year to year, the power of money in purchase
would give to annuitants and other contracting
parties, the means of maintaining an agreement,
not in its letter only, but in its spirit ; of conferring
on a specified sum a uniformity and permanency
of value, by changing the numerical amount in pro-
portion to the change in its power of purchase.
But it by no means follows, that a change of
numerical amount ought to be annual : it would,
doubtless, be sufficient that it took place at periods
of three, five, or seven years, taking as the cri-
terion the average value of money in purchases
throughout the whole period.
Documents for the Formation of such a Table. —
By what means would ,it be practicable to ob-
tain the information necessary for the completion
of a table of national consumption ? As yet the
official materials are limited, or rather the appli-
cation of them has been on a confined scale :
enough, however, has been done to show the prac-
ticability of obtaining the information we desire.
Thus, in regard to corn, the registers, both as to
price and quantity, are now on a more satisfactory
footing than in former years : of sugar, a similar
record has long been kept, and there are als^
registers, which might easily be rendered more
complete, of our woollen and linen manufactures.
Of the consumption of all excised articles, es-
T 4<
280 Plan for giving a steady Value
timates approaching to correctness may be formed
from documents in possession of that Board ; while
in regard to foreign commodities, the custom-house
would supply similar results. Then, as to average
prices, there are the books of the Victualling
Office, of the Commissariat department, and of
public hospitals, such as Greenwich. The Board of
Agriculture has at various times obtained inform-
ation, not strictly official, but substantially correct,
by sending circular letters to their correspondents
throughout the kingdom ; a plan acted on to a
great extent by the late Arthur Young, in 1811.
Returns of this nature, when obtained, might
easily be reduced into the tabular form on the same
plan, but with much more discrimination than was
shown by the late Mr. Colquhoun. Since the date
of his calculations (1812), great changes have oc-
curred in respect both to price and quantity, and
to make the collections with the accuracy requisite
to form a document of authority would require
an extent of labour beyond the means of an in-
dividual. A task of such length, and of such
general utility, should be defrayed from a common
fund, and government, if unwilling to give so
direct a sanction to a new project, as would be
implied by the appointment of persons for collect-
ing and comparing materials, would, doubtless, on
the demand of any respectable association, com-
municate all returns in the public offices that are
applicable to the subject.
Referring to the Appendix for the details of
the table, and the calculations connected with it,
we shall at present, for the sake of illustration,
take its establishment for granted, and proceed to
discuss the effects that such a measure would have
on the great interests of the country.
to Money Contracts. 281
Effect on the labouring Classes of the adoption of
such a Standard. — The use of money to the largest,
though humblest class in society, is very simple,
extending to little beyond the purchase of the
articles mentioned in the preceding sketch of the
expenditure of the cottager. It is subject, how-
ever, to some modification in the case of the in-
habitants of towns, among whom the proportion
required for house-rent, fuel and clothing is larger,
and that for provisions smaller than in the family
of the cottager. To both, the chief object of
expence is corn, the average price of which is
already ascertained periodically ; but to render the
table complete, our wish would be, that the average
of the other articles consumed by the labouring
classes, such as beer, coarse clothing, fuel, were
in like manner put on record. If to such returns
were added a few plain tables of the average con-
sumption of the lower class in various situations,
one for an unmarried labourer, others for a la-
bourer married, and having two, three, or four
children, it would be an easy process to calculate
how far a given sum of wages (for example 45/.
annually) was more or less adequate than in former
years to the supply of such wants. We should
then possess completely the means of judging of
the comparative comfort of the working classes ;
of making, in a manner satisfactory and con-
clusive, the calculations hitherto prepared with
much labour, and an unavoidable share of error
by Sir F. Eden, Mr. Barton, and others.
How important would have been such a stand-
ard of reference throughout the last thirty years, a
period of such frequent contention between the
employer and the employed ! During the war.
282 Plan for giving a steady Value
workmen in towns were repeatedly obliged to
combine for the purpose of raising their wages to
the level of provisions, and in rural districts, where
combination was impracticable, the poor-rate was
called in to supply the deficiency. At present the
case is reversed ; the employer, whether a farmer
or a tradesman, has found, and will long find it
a matter of the greatest difficulty to reduce wages
to the standard justified by the fall of provisions.
What a scene of inequality is exhibited at pre-
sent by the current payments of the metropolis !
Wages, salaries, professional fees, are almost all
on as high a scale as during the war, notwith-
standing the cessation of the two great causes of
rise, — the expence of living and the extra demand
for labour. The persons, whether of high or low
station, who are in receipt of the established al-
lowances, if called on for an abatement, would
naturally plead the uncertainty of provisions con-
tinuing at their present rate : and nothing, it is
evident, will induce them willingly to assent to a
reduction, except a guarantee against a recurrence
of the grand evil — a rise of prices. In this most
desirable object we should hope to succeed, not by
a compulsory course, not by an interference be-
tween the payer and receiver, but by an alternative
offered to their voluntary adoption ; by putting it
in their power, when making a time contract, to
give a permanent value to a money stipulation ;
or to find, when no such precaution was taken,
an equitable standard of reference.
Such a regulator would carry con viction to all par-
ties, and operate greatly to abridge altercation. At
a time like the present, it would relieve the inferior
from much of the anxiety and humiliation attend-
ant on reduction j arid, in the case of a rise of
to Money Contracts. 283
prices, it would guide the employer to a fair ad-
vance of wages, the distributor of charitable aid to
a fair apportionment of relief.
Effect of such a Measure on Agriculture. — In no
department of our productive industry, has our
progress as a nation been less conspicuous than in
tillage ; our superiority over our continental neigh-
bours being in a great degree limited to our live-
stock and our machinery. On computing the an-
nual amount of property created in the kingdom,
we find, after making a great deduction from the
prices (moderate as they were, considering the
state of markets at the time) assumed by Mr.
Colquhoun, that the annual produce of the agri-
culture of Great Britain and Ireland still amounts
to 120,000,000/. What a field is here open for
the application of skill and judgment, and how
great the call for both under the present distress
of our agriculturists !
It is not a little remarkable, that several of the
counties, such as Norfolk and Northumberland, in
which our husbandry is most improved, are by
no means our most fertile districts naturally.
To what, then, are they indebted for their su-
periority ? To a cause which Mr. Coke has repeat-
edly pressed on his brother land-holders, both in
and out of parliament, — that there is no good agri-
culture without leases. In what other way can we
explain the high rents paid in a country in
general so little favoured in soil and climate as
Scotland ? The objections of our landlords to
long leases, are various, arising partly from the
habits of their predecessors ; partly from a reluct-
ance to part with the command of their property
for a number of years j but, more than all, from
Plan for giving a steady Value
the uncertainty of the value of money. During
the war this uncertainty was of very serious im-
port : at present it is removed, as far as regards
landlords, by the return to cash payments, and
the difficulty now is to induce a solvent tenant to
take a lease. To both parties, therefore, the fluc-
tuation of our currency, even when metallic, is
replete with anxiety.
Of late, the great fall of price has induced
several of our principal land-holders to regulate
their rents by the price of corn ; a plan open to
many objections, when varied from year to year,
because, a season of high price may be, and prob-
ably is, a season of deficient produce. When
calculated on the price of a series of years-, this
course is less exceptionable : in any form, how-
ever, it seems less eligible than the plan which
(Appendix, p. 98.) we are desirous to propose, of
combining the price of corn with that of other
articles of consumption.
Tithe. — Referring to the remarks under this
head in the Appendix, we shall at present merely
observe, how great would be the benefit accruing
from a regulating standard, applied to clerical
income, and calculated, as far as regards perma-
nency of value, to justify the church in commuting
tithe for a money stipend. A change of that
nature would, on the one hand, put an end to
altercations unfortunately too frequent, while on
the other, it would prevent tithe from operating
as an impediment to agricultural improvement.
The great, and at present, well-founded objec-
tion of the clergy, to a permanent commutation
of tithe, is a dread, not of the faith of parliament,
but of the uncertain value of money : remove that
apprehension and you give them substantial mo-
to Money Contracts. 285
lives to prefer a fixed sum, whether they look to
the interest of themselves or their successors. In
the protestant church of Holland, they have an
example of stipends paid during more than two
centuries, by magistrates or by government, without
any derogation from the respectability of those
who received them : and if in France, the amount
of clerical income be too small to be dwelt on
when we are treating of a Protestant establishment,
the regularity of its payment during twenty years,
under circumstances of great financial embarrass-
ment, is calculated to lessen one material ground
of apprehension.
The commutation to which we allude, does not,
of course, imply any reduction of the existing
income of the clerical body, nor a relinquishment
of any security arising from the tenure by which
they are at present invested with tithe. A change
from an unfixed to a fixed money income, may
evidently take place without interfering either
with such security, or with the patronage of the
church as at present established. But on this we
will not enlarge, our subject naturally confining
us to the result of the measure in a statistical
view ; a view in which it would soon disclose the
most satisfactory results. Under our present sys-
tem the church is entitled to an increase of reve-
nue in proportion to the increase of produce, but
such, we may safely take for granted, would form
no part of its demand under a different arrange-
ment. All that its representatives would be likely
to desire, would be an assurance that the contract
should be maintained bondjide, that the sum once
fixed should be made good, whatever be the fluc-
tuations of our currency.
286 Plan for giving a steady Value
What would be the result to the agriculturists
of a change of the nature we have supposed ? All,
whether landlords or farmers, might extend their
tillage as they chose, without being annually
taxed in a portion of the produce. Our numbers
are on the increase ; our production increases
with them, and it is, above all, in a case of such
increase, that the pressure of tithe is felt. An
exemption from it is most strongly called for by
our situation, present and prospective ; and may
we not add, that when viewed in connexion with
the various circumstances stated in our chapter on
Agriculture, it would render probable, a result,
on which, at present, it seems somewhat bold to
speculate, we mean Mr. Tooke's idea of the prac-
ticability of our competing with foreigners in the
export of corn, as was done by our countrymen
previous to 1764.
Application of the proposed Plan to the Public
Funds. — The effect of such a plan, applied to the
public funds, would be of the highest importance.
It would ensure to the stock-holder and his poste-
rity, the same income, whether the country was
at peace or war ; whether its currency were sound
or depreciated ; whether the mines of gold and
silver throughout the world, became more or
less productive. The 100/. of 1792, which in
1806 was equivalent to 80/., and seven years after,
to only 60/., would thus remain 100/. throughout.
The apprehensions which at present not unfre-
quently lead to sales of stock against the wish of
the holders, would cease or be materially diminished,
and funded, like landed property, would be sel-
dom disposed of, except on particular occasions,
such as when a repartition of property became ex-
to Money Contracts. 287
pedient on the demise of a testator, on legatees at-
taining majority, or on their entering on mercantile
business. In fact, after the adoption of such a mea-
sure, the chief features of distinction between land
and stock, would be, that while the one possessed
the attraction of local influence, the other would
have the more direct advantage of dispatch and
certainty in regard to receipt of income.
Its Effect on the Price of Stocks. — Nothing can
be more different than a rise of stock caused by
the adoption of a plan such as we propose, and a
rise that might be consequent on the operation of
a large sinking fund. The latter would have a
perpetual tendency to counteract itself by render-
ing the price of the principal disproportioned to the
interest; it would afford, moreover, a strong in-
ducement to sell out and to vest capital in other
securities, probably in foreign stock. But a rise
proceeding from a course such as we are anxious
to recommend, would prove an inducement to keep
capital in our funds, the value conferred by the
measure being, in its nature, permanent and
likely to increase.
All this may be admitted, but the plan, it will
be said, can be adopted by the governments of
other countries, and our stocks soon deprived of
any relative superiority which it might confer.
Our answer is, that the success of such a plan,
and the extent of rise attendant on its adoption,
will depend chiefly on the degree of confidence
that each nation has in its government ; a point in
which we possess a great and undoubted supe-
riority over the rest of Europe.
The present is, we believe, the first proposition
of a measure for giving a permanent value to our
288 Plan for giving a steady Value
funded property. Our public men, or rather the
few among them who are accustomed to take com-
prehensive views of finance, have hitherto contem-
plated a very different course. Money, they saw,
was declining in value during half a century, and
funded property declined with it ; a fall carefully
kept by them in the back ground, and consequently
in a great measure unknown to the public. Our
successive chancellors of the exchequer antici-
pated (see pp. 71» 7#0 a continuance of this de-
cline, and silently calculated on its producing a
diminution in the pressure of our debt. But the
re-action of the last eight years, has greatly shaken
this calculation : money has recovered, and along
with that recovery, the pressure of our debt has
greatly increased. It is time, therefore, to seek
relief in a measure of a different character.
This brings us to a question, which, under pre-
sent circumstances, may very naturally be asked by
our readers, — why confer additional value on the
funds, at a time when they have risen so consider-
ably in the scale of comparison with land, houses,
and merchandize? Our answer is, that we con-
template no undue favour to. the stock-holder ; we
merely point out a measure, which, by benefiting
him in the first instance, may give government a
fair plea to demand from him a return calculated
to afford relief to other classes of the community.
To require such from the fund-holder without a
consideration, would, of course, imply a sacrifice
on his part, but the results which we anticipate
from the proposed measure, will, if they be well
founded, confer on him in one way as much as
he may be called on to relinquish in the other.
Thus, if it continue a favourite object with minis-
ters to reduce the interest on the old four per
to Money Contracts. 289
cents., nothing is so likely to promote that mea-
sure, as conferring an additional value on funded
property. And if it be said that such would be a
return partial and inadequate to the advantage
conferred, the question may be cut short by the
general argument, that if we succeed in improving
materially the circumstances of the fund-holder, or
of any great class in the community, government
can have no great difficulty in rendering that pros-
perity conducive to the relief of the public at large.
On the mode of doing it, we shall enter more fully
at a subsequent date : at present, our object is
merely to convey an outline, and to satisfy our
readers, that from giving a permanent value to our
public dividends, a result, generally beneficial,
might be expected.
We conclude this chapter by a few remarks on
the general characteristics of the proposed plan.
Does it, it may be asked, contain any thing com-
pulsory or unfair, and in particular, does it imply
the imposition of any burden on posterity ? Our
posterity will, in all probability, be in a far easier
condition than ourselves, and would incur no loss
from our conferring the character of permanent
value on our dividends : on the contrary, they
will, doubtless, be benefited by whatever shall be
found conducive to the relief of the present gene-
ration. Our proposition may be termed an attempt
to fill up a blank in the mode of regulating our
productive industry, and to do it in a way not fan-
ciful or artificial, but on the principles of unre-
served freedom so strongly recommended by Dr.
Smith and other eminent authorities. The provi-
sions of the proposed measure would be all volun-
tary : a standard would be afforded to the public :
an example of its application might, perhaps, be
u
290 Plan for giving a steady Value
given by government, but whether such were the
case or not, the course to be followed in private
transactions, would be perfectly optional : the
contracts of individuals, whether relative to loans,
leases, or bequests, might, at the will of the par-
ties, be made payable, either according to the
proposed standard, or, as at present, in money of
undefined value.
Such would be the operation of the proposed
plan in regard to individuals. Of its result in a
national sense, we may safely say, that the removal
of uncertainty from time contracts would contribute
most effectually to the extension of our national
industry. That industry and its results have been
carried farther by us than by almost any of our
neighbours, but we are still far from having reached
a terminus : and no slight share of exertion will be
requisite to raise our national income to the amount
necessary to bring it to that equality of pressure,
that proportion between taxation and resource
which prevails in other countries.
How far, it may be asked, has the proposition
now made, the sanction of precedent? That sanc-
tion, though it cannot be cited as of frequent oc-
currence, is not altogether wanting. The course
now suggested, is analogous to the plan of corn
rents lately adopted by several of our great pro-
prietors, and which, for many years has been ex-
emplified in the proceedings of the court of Teinds
or tithe of Scotland. The decisions of that court
purport that clerical income shall be regulated by
the price of corn in the public market during a
series of years. But were precedent wholly want-
ing, the rule, " that prospective engagements should
be framed so as to maintain their bonajide value,
whatever be the value of money," is so equitable,and
to Money Contracts. 291
apparently so easy of execution, that there seems
some difficulty in accounting for its not yet having
found its way into practice. This has, we believe,
been owing to two causes ; the unfortunate neglect
of political economy in the education of our pub-
lic men ; and the interest of government, the
greatest of all debtors, to allow money to undergo
a gradual depreciation.
u
CHAP. X.
Our Finances.
WE are now approaching to the end of our vo-
lume, and to the conclusion of our reasoning,
having arrived at that department which most im-
mediately affects the national welfare, and the
changes in which form the most anxious object of
public attention. In this, as in the former chap-
ters, we shall begin by a statement of facts, a
retrospect to history, and after removing, or en-
deavouring to remove, several popular errors, we
shall proceed to develope the measures apparently
best adapted to our present situation, greatly al-
tered, as it has been, by the events attendant on
peace.
We propose dividing our discussion into the
following heads : —
A historical sketch of finance operations j
The sinking fund, its merits and demerits ;
The arguments for a farther reduction of taxa-
tion ; and,
The length to which, with our present prospects,
the demand of reduction may safely be carried.
The National Debt. — A public debt in one
form or other, has been, in almost every country,
an appendage of established government. Its
ike National Debt. 293
amount, however, seldom exceeded an anticipa-
tion of one or two years' revenue, until the fund-
ing system, or plan of rendering public obligations
transferable from hand to hand, gave governments
a surprising facility in borrowing. This, like
many other ingenious schemes, both in civil and
military affairs, originated with the Italians, and
was adopted early in Venice, Genoa, and Holland.
In England, it was not introduced until the great
struggle made by King William against the ag-
grandizement of Louis XIV. ; but if we were
somewhat late in following the example, in our
ultimate progress we have far surpassed our neigh-
bours. Our debt amounted,
At the peace of llyswick - in 1697 to - £21,500,000
of Utrecht - - 1713 - 54,000,000
of Aix la Chapelle - 1748 - 78,000,000
of Paris - 1763 ~ 134,000,000
of Versailles - - 1783 - 238,000,000
of Amiens - 1802 - 452,000,000
of Paris - 1815 nearly 700,000,000
To which, adding the debt of Ireland, somewhat
more than 100,000,000
Total present debt about - 800,000,000
These sums represent the total of our debt at
each period, without the perplexing distinctions of
funded and unfunded, redeemed and unredeemed.
Though the figures express an amount, not of
money but of stock, the diiference at peace prices
is not much more than nominal : thus, our pre-
sent debt, were it practicable to pay it off at the
market price, would require an amount in money,
not greatly below the S00,000,000/. of stock. But
as there is no more reason to anticipate the liqui-
dation of the debt of this than of other countries,
u 3
the iri6te correct course, and that which conveys
thfcrriore distinct idea of the extent of the burden,
is tb follow the French method of computing the
responsibility of government, not by the principal,
but by the sum required to pay the interest * a sum
which, since the reduction of the Five per cents.,
may be called, in round numbers, 30,000,000/.
Flttctuatio?is in the Price of Stock. — By fluctu-
ations in stock, we must be understood to mean
changes proceeding, not from the rumours per-
petually ih circulation on the Stock Exchange,
which are too absUrd fbt notice, and operate only
for a few days, but frbrtt c^ttses of a more ctfm-
prehensive and permanent character ; — the credit
or discredit of government ; scarcity or abilrid-
ance of capital ; the adequacy or inadequacy of our
resources to our burdens. The extent of fluctua-
tion has, of cours^ been very great at different
peribds 6f our history. During the peace that
followed the treaty of Utrecht and the prudent
administration of Sir Robert Walpole, stocks rose
greatly^ the three per cents, having attained par
ift 1732, and being, in1 1739, the time when that
minister was forced by popular clamour to declare
war against Spain, at the very high rate of 107/. in
cash for 100/. in stock; They continued high
during several years of the war ; and it was not
until the range of hostilities widened, and assumed
a serious aspect, that their fall became great.
The same may be said to have applied tci the more
successful contest begun in 1756, the three per
eefits continuing between *JQL arid 80/., until 1760,
when our loans in consequence of the national ar-
dour and the confident character of Lord Chat-
were carried to an amount at that time un-
Fluctuations of Stock. 295
precedented. In the American war the fall was
more rapid : it was great from the time that France
took part against us, and the public became aware
of the imbecility of our ministers in conducting
the contest.
Mr. Pitt's Administration. — In 1784, Mr. Pitt
succeeded to a financial charge, productive for
several years of great contention and embarrass-
ment : our prospects, however, gradually bright-
ened, and ere the expiration of the ten years of
peace that preceded the war of 1793, the nation
had risen superior to its difficulties. This was
the eera of the so-much-applauded revival of the
sinking fund. Partly by the effect of that measure,
more by the general prosperity of the country, our
3 per cents, were carried in 179^ to the high price
of 97 ; a price from which they fell as soon as the
public became aware that our government had de-
termined to take part in the coalition against
France. But as during the first two years our
expences were comparatively limited, the great
decline did not take place until 1796, or rather
1797, when the 3 per cents, sunk to the unex-
ampled low rate of 47. It was then that our
minister felt the necessity of altering his financial
plan, of lessening loans and augmenting taxes :
he came forward accordingly with the bold pro-
position of raising a large proportion of the sup-
plies within the year ; a course, which, alarmed
as the nation was at the aggrandizement of France,
obtained general concurrence, and soon received
a consolidated form by the imposition of the in-
come or property-tax.
In consequence of this decided measure, and of
the splendid success of our continental allies, in
u 4
296 Our Finances;
1799 our stocks revived, but they fell towards the
close of the year, when the fickle Paul forsook the
coalition, and Bonaparte, ariving from Egypt, gave
new vigour to the resources of France. Large
loans became again indispensable, and our funds
continued comparatively low, until the signature
of the preliminaries in October 1801. That event
had a tendency to reinstate them, but the peace
was too short and too doubtful to admit of any
great rise.
War of 1803. — On the renewal of war in 1803,
the 3 per cents, fell from 70 to 57, and during
some time, the general dread of invasion kept
them at a very low rate. War taxes, however,
were cheerfully submitted to, and in the succeed-
ing years (1805, 6, 7.), these potent auxiliaries
enabled government to lessen the loans, and to
raise the 3 per cents, to 60 and upwards. The
same cause explains their continued high price in
1808, a year of commercial distress, and in 1809,
a season of general over-trading. Nor was it till
the multiplied bankruptcies of 1810, and the heavy
drain of money for the peninsular war, that the
fall became considerable. Large loans were now
unavoidable, and stocks were lowered not only in
1812, a year of chequered fortune to our arms,
but during part of 1813, when our prospects were
equally cheering in Spain and Germany. At last
the balance inclined to the favourable side : the
victory of Leipsic and the evident superiority of
the allies outweighed the demands of our Treasury,
enormous as they had become.
From 181,5 to 1822. — In the early part of 1815
the 3 per cents, were fluctuating from 62 to 65,
when the return of Bonaparte from Elba, pro-
duced a very sudden reduction. In the contest
Measures since 1815. 297
that ensued, government were unluckily obliged
to contract for a loan early in June, and were thus
deprived of the benefit of the rise which imme-
diately followed the success of our arms. In 1816,
peace was consolidated, but the price of commodi-
ties experiencing a great fall, and much distress
prevailing in both trade and agriculture, the funds
recovered very slowly. In 1817, appearances im-
proved, and in the early part of 1818 the 3 per
cents, having risen above 80, our prospect became
very encouraging. Unfortunately the rise was not
of long duration : the mismanagement of the
French loan, the over-trading in this country, the
distress of the United States of America, all con-
curred to depress the funds. They continued low
during the two years from the summer of 1819 to
that of 1821, after which, they gradually improved,
so as to enable ministers to carry into effect an
important and long contemplated operation.*
Reduction of the Five per Cents. — The five per
cents comprised a sum, which in round numbers
we shall call 14<0,000,000/., and which government
were at any time at liberty to pay off, by giving
WQL in cash for 100/. in stock. How then, it may
be asked, did it happen that the discharge was
delayed so long after the peace ? Because the
* Average Prices of the 3 per Cent. Consols during the fol-
lowing years : —
1803 70, 57, 53.
1801- 55, 56, 58.
1805 56, 58, 60.
1806 60, 62, 64.
1807 61,62,64.
1808 62,64,66,68.
1809 67, 68, 70.
1810 70,71,69,66.
1811 65,64,63.
1812 62,61,59,58.
1813 58,57,60,61.
1814 64, 66, 64.
1815 65, after Mar.58, 60.
1816 60, 62, 63.
1817 63, 70, 75, 83.
1818 80,82,79.
1819 77,74,65,70,68.
1820 68, 69, 70.
1821 69, 72, 75, 77.
1822 (to Aug.) 76, 77, 78, 80.
298 Our Finances ;
discharge of so large a sum could take place only
by the substitution of one security for another ;
and as the new fund to be created, would in most
of the years that have elapsed since the peace,
haVe fetched an indifferent price, ministers were
from time to time obliged to postpone the measure.
In the early part of 1818, circumstances becom-
ing favourable, a new stock bearing 3$ per cent,
interest, and 'not reducible below that rate during
ten years, was created evidently for the purpose
of supplying the desired substitute. The project,
however, failed in consequence of the general fall
of funded property, and there afterwards occurred
no favourable opportunity until the beginning of
die* present year, when; as is well known, the re-
duction wa*s very successfully accomplished.
There remains open to reduction a farther por-
tion of our stock, viz. the old four per cents.^
which, distinguished frbni the four per cents,
created in the present year, amount to about
70,000,000/. This sum is krge, but in other re-
spects the question of reduction stands on very
doubtful grounds. The saving of a half per cent,
in the interest would give only about 300,0007.
clear, and it seems very doubtful at what period
the course of circumstances will admit of even
that diminution.
Our other Financial Measures. — The course
contemplated by government at the close of the
war, was to keep up an efficient sinking fund, and
to continue during several years the property-tax
on the reduced scale of 5 per cent. This plan
fell to the ground on the rejection of that tax by
the House of Commons on 18th March, 1816 ;
a rejection altogether unexpected by ministers,
Measures since lSl5. 299
and which has since been repeatedly declared by
them to have been productive of great public
injury; To this opinion, though Expressed de-
liberately, and long after the first impression, of
disappointment, we can by no means subscribe.
Had the burden been inevitable, and liftd the
question beeri merely a commutation of one pay-
itient fbr another, a property-tax might have been
somewhat less oppressive than' sevferal of the exist-
ing imposts ; but; under all the circumstances of
tile ciise, the1 rejection bf the1 bill was1, we are
satisfied, productive of public good; Me"n ifci
office are often very imperfectly apprized of the
circumstances, not merely of individuals, but of
numerous portions of the community. In the
session immediately preceding, they had; by the
magnitude of their grants, slibwfl them'selves un-
apprised of the didtredsiflg change which w&s thetl
beginning tb take place ; of the1 extent df the
Idss attendant bn the transitidh frbhi war td peace $
oi' th£ apprdachihg fall of prices, the increasing
pressure bf taxation. Tb all this they were
awakened by the Idss of the bill* and taught, fbr
the' first tinie in twenty years, the necessity of ne-
gativing the importunate demands to which the
holders df office are perpetually exposed^ Besides,
a property-tax, had it been imposed in 1816, would
have been productive^ distressing as was the time
that followed; of loud complaint, perhaps of serious
and general injury.
The next financial measure of importance took
place in 1819, when ministers having called on
parliament to give efficiency to the sinking fund,
succeeded in a measure little expected in the
midst of peace, the imposition of new taxes to the
amount of S,000,000/. These were imposed chiefly
300 Our Finances ;
on malt, spirits, and tobacco, and paid with great
reluctance during the two years of doubt and em-
barrassment which ensued. Of late, however,
brighter prospects have opened, and a diminution
of expenditure has been promoted by a concur-
rence of causes, — tranquillity among our lower
orders ; the reduction of the 5 per cents. ; and a
transfer, or expected transfer, of a portion of the
burden of our half-pay and pension list to the next
generation. The consequence^ has been a reduc-
tion of our taxes in the last and present year, to
the amount of nearly 4,000,000/.
The Sinking Fund.
The idea of a Sinking Fund is of old date,
having been conceived more than a century ago,
by Sir R* Walpole, the only public man of his age
who appears to have been conversant with finance.
The original plan was simple, the fund being
formed in the first instance of a small sum of sur-
plus revenue, and augmented progressively by the
interest of such part of the debt as was paid off by
its operation. Here was no display of the wonders
of compound interest, but the long peace that en-
sued favoured the reduction of debt, and the fund,
though small, was progressively increasing. Such
continued the course of circumstances until 1733,
when the troubled aspect of the Continent, and
the difficulty of imposing new taxes, necessitated
an interference with some disposable resource, and
the sinking fund was encroached on. A prece-
dent once given, trespasses became frequent, and
this fund, though never abolished, proved of so
slender operation, that in the course of half a cen-
tury, it had not discharged above 15,000,000/. of
the Sinking Fund. 301
our debt. At last, in 1786, the scheme was re-
vived with augmented energy, aided on the one
hand by Dr. Price's flattering calculations of the
effect of compound interest, on the other by Mr.
Pitt's declared determination to consider its funds
inviolable. The new plan was in substance the
same as that of Sir R. Walpole, but the reserve
was invested with many additional safeguards,
being committed to a special board of commis-
sioners who were independent, not merely of the
Treasury, but in some respects of Parliament.
It was at this time that the public first became
familiar with the term " Consolidated Fund,"
which meant, however, nothing more than our
taxes, formed into an aggregate, out of which
government pledged itself, whatever might be the
proportion of our revenue to our expenditure, to
pay a million annually to the new commissioners.
This fund of a million was strengthened by two
other sources of supply ; the amount of govern-
ment annuities as they successively expired, and
the interest of such stock as was annually re-
deemed. The measure now brought into opera-
tion, paid off the following sums :
In 1787 £ 662,750 Stock.
1788 1,456,900
1789 1,506,350
In 1790 £ 1,558,850 Stock,
1791 1,587,500
1792 1,507,100
These sums, small as they were, could hardly be
considered bondjide reductions of the public debt,
since the Spanish armament in 1790 necessitated
an addition to our burdens of nearly half their
amount. In an arithmetical sense, accordingly,
the effect was inconsiderable ; in a political sense it
was otherwise, as it excited the expectation of great
302 Our Finances;
subsequent reductions, Tq strengthen this ex-
pectation, and to remove an apprehension that
a renewal of war, by necessitating new loans, might
cast these annual liquidations into the shade, Mr.
Pitt obtained in 1792, an act of parliament de-
claring that all future loans should cany in them-
selves the means of their progressive extinction,
ministers, on contracting a loan, being pledged
to " provide taxes, not only for the interest but
for an addition to the sinking fund." This pro-
vision, whether at bottom, judicious or not, was
very favourably received by the public, and had,
in concurrence with the commercial prosperity of
the year, the effect of producing a very consider-
able rise in the funds.
But this flattering prospect was forthwith over-
cast by our participation in the war against France,
and the unparalleled magnitude of our expence.
The sinking fund was maintained and operated a
large apparent reduction, but the result, in a de-
finitive sense, was null, our debt being augmented
in a far greater ratio by our annual loans. After
all that we have been told of the operation of the
sinking fund ; after the pompous statements of
hundreds of millions redeemed by it ; after all the
eloquent effusions in its praise by both sides of the
House, the public will learn with some surprise,
that since 1786, this fund has had a real operation
during twelve years only, and that the actual re-
duction effected by it, has not averaged a single
million a year ! In this we are to be understood,
as leaving the twenty-three years of war wholly
out of the question, and confining our calculation
to the six years preceding 1793, and the six years
subsequent to 1815.
the Sinking Fund. 303
Compound Interest. — The surprising results as-
cribed in our time to compound interest will be
cited by the future historian, as affording a striking
example of the power of enthusiasm in the original
calculator, and of the extent of credulity on the
part of the public. In >var, the sinking fund is
supported by loans, and is it not apparent, that
whatever may be the beneficial result of accumu-
lation in the hands of the commissioners of the
sinking fund, the loss to the public from the addi-
tional loans required by it must be in the same
compound ratio ? We might even add, that in all
cases of taxation, where the import has not (and
it very rarely has) the effect of inducing economy
in the individual, the loss is to be reckoned by
compound interest, since had the money been left
in the hands of the subject, the increase would
have been in the compound form.
Without entering into any arithmetical statement
or even pressing the argument in an abstract form,
we may safely make the general assertion, that the
power of the sinking fund, whatever it may have
been, has arisen " not from actual payments but
from its influence on the public mind ;" — from its
presenting ^possibility of an ultimate repayment of
the debt ; — a possibility transformed into confident
expectation by the ardour of the public and our
natural inclination to believe what we wish.
Present State of the Sinking Fund. — Such was
the state of our financial concerns until the begin-
ning of the year, when, by the double effect of
reduction of expenditure and increase of revenue,
an actual surplus was produced, and the sinking
fund was likely to become efficient to the extent of
4 or 5,000,000/. a year. We seemed now on the
304- Our Finances ;
eve of attaining the result so long represented as
desirable by ministers ; the possession of an engine
for raising the price of stocks, or in other words,
for reducing the rate of interest on private secu-
rities. In what manner, it may be asked, would
the latter prove a consequence of the former ? In
France, where the interest of the public debt does
not form 10 per cent, of the income arising from
property, and the nature of government securities
is not generally understood, the interest of money
vested in land, houses, and trade, is not very mate-
rially affected by the price of the public funds.
Land continues to be bought with eagerness for
3, 3£, or 4 per cent, on the purchase money, at a
time when the same capital would yield above
5 per cent, in the funds. In this country the case
is otherwise. Our dividends forming no less than
30 per cent, of the income arising from property,
their influence is great ; while, notwithstanding the
preference given to land, the difference of the in-
come derived from land or stock seldom exceeds
one per cent. It follows that a reduction of the
rate of interest in our funds has a direct tendency
to lower the interest on private securities, and it
was, doubtless, on this calculation, that the country
gentlemen (see the speeches of Mr. Stuart Wortley
and others during last session) consented to limit
their demand for a reduction of taxes, hoping, that
by the aid of the sinking fund, the interest on
mortgages would be effectually reduced.
What, in a statistical sense, are the characteristics
or accompaniments of a low rate of interest ? It is
indicative of abundant capital, and of a very ad-
vanced state of productive industry. It was this
which formed the great feature in the situation of
Holland during the chief part of the 17th and 18th
the Sinking Fund. 305
centuries, and enabled her government to lower her
dividends in an age when France and other states
borrowed at very high interest. It was this which,
under Sir 11. Walpole, formed the strongest proof
of the revival of our financial credit, and which
in 1749 enabled Mr. Pelham to effect a well-known
and highly beneficial reduction. But, in none of
these cases, nor in any other of which history has
preserved the record, did the fall of interest arise
from the operation of a sinking fund. It was the
natural consequence of confirmed peace, of the
diminished demand for capital, of a fall, or ten-
dency to fall, in the rate of interest in private as
well as public securities. Even in the present year,
it is to the existence of these circumstances, much
more than to any surplus in the revenue, that we
attribute the fortunate accomplishment of that great
operation, the reduction of the five per cents.
If our readers see with some surprise these de-
ductions from the efficiency of a measure so much
vaunted, they will be no less struck with the farther
part of our argument ; viz., that a large sinking
fund, or, to describe it in the most simple terms, a
large surplus revenue applied to the redemption of
Stock, would be productive of public injury. By
lowering unnaturally the rate of interest, it would
send capital abroad, and operate as a fund to raise
the Stocks of France or America. This result is
too obvious to have escaped the observation of
either the Bank directors or our ministers : in fact,
the readiness with which the latter consented in
the present year to relinquish their surplus re-
venue by remitting taxes, seems to indicate a con-
viction, that a rise in the value of stock, pro-
duced artificially, would be replete with injury to
the public, They cannot fail to be aware, that
x
306 Our Finances ;
since the reduction of the five per cents., there
remains no adequate object for interfering with the
current rate of interest, or for discovering a soli-
citude on the part of government, to raise the value
of the funds more than of land, or any other de-
scription of property. If, in commercial affairs,
ministers have, during the last ten years, evinced
strict impartiality, and abstained from the interven-
tion so unfortunately exercised by their predecessors,
is it likely that in finance they will follow a different
course ? Our debt admits of no direct reduction :
our hope of relief is in that diminution of pressure
which will follow the increase of our means ; —
the augmentation of our numbers and national in-
come ; — a result most likely to be promoted, by
considering property of every kind equally entitled
to the care of government.
But, if such be the conviction of our rulers,
why, it may be asked, do they still cling to a name,
and hold forth the sinking fund to parliament and
the country, as an institution excellent in its prin-
ciple and entitled to such zealous support ? Partly
from the maxim, so familiar to politicians, of lead-
ing men by their prejudices ; partly, perhaps, from
a deficient acquaintance with the backwardness of
other countries, and a consequent diffidence in cal-
culating the relative progress of our own. No
speaker in parliament, whether ministerialist or op-
positionist, appears to have studied the comparative
prospects of England and her neighbours, in re-
gard to national wealth, or to be sufficiently
aware of the inferences they suggest.
The admissions successively made by the sup-
porters of the sinking fund (Appendix, p.103.) have
removed part of the mystery which, by the aid of
such phrases as "inviolability of deposit" and "oper-
the Sinking Fund.
307
ation of compound interest," had so long encircled
it. After the committee on the public accounts pro-
mised for next year, the nominal part of the sink-
ing fund will probably be relinquished, and the
remainder described merely as a surplus revenue
appropriated to the redemption of stock. As such
we request our readers to consider it at present,
estimating its amount less by the tone still kept
up by its supporters, than by a plain comparison of
our revenue with our expenditure. To enable them
to do this without unravelling a long list of finance
papers, we subjoin an
Estimate of our Annual Expenditure for 1822
and 1823.
Army, including half-pay and pensions - ^8,000,000
Navy, including ditto - 5,500,000
Ordnance, including ditto - 1,200,000
Miscellaneous - - - 1,600,000
Civil list ; pensions for Civil Services ; Courts of
Justice ; civil Government of Scotland, and
some lesser heads, all charged on the Consoli-
dated Fund . 2,000,000
Add for all other payments, such as those to
Greenwich Hospital, the East India Company,
or unforeseen charges, such as have occurred
this year in Ireland - 1,700,000
Amount of expenditure distinct from the interest
of the debt - - 20,000,000
(This sum will be subject to diminution in propor-
tion to the sale that may take place of half-pay
and pensions for long annuities.)
Interest of the public debt
- 30,000,000
Total - £50,000,000
Our bondjide sinking fund can, of course, be
nothing else than the surplus of our income above
our expenditure, and will be one, two, three, or
x 2
308 Our Finances ;
more millions, according to the productiveness of
the revenue, and the progress of the conversion of
life interests into Long Annuities.
The next and equally important question is,
whether a surplus., when found to exist, ought to
be applied to the redemption of stock, or made, as
in the last session, a ground for the immediate
remission of taxes. We subscribe, without hesi-
tation, to the latter, not merely for the sake of relief
to the public, but on the less-understood ground of
the injurious consequences of interfering with the
price of stocks. Against this, however, it may be
urged, that men of the most opposite views in po-
litics have concurred in eulogising the sinking
fund — that Mr. Fox was, in this respect, no less
zealous than his great antagonist. Mr. Fox, it is
well known, never made a study of finance, still
less of political economy ; his conclusions, in these
as in many other respects, when well founded, owed
their justness less to continued research or careful
comparison, than to rectitude of feeling, to a man-
liness of character, which, in a question like the
present, would prompt him to adopt, without much
investigation that course, which should place the
burden on the shoulders of ourselves, instead of
our posterity. Again, Mr. Pitt, on introducing
the sinking fund, was only in his twenty-seventh
year, and could not, from the pressure of other
avocations, have been able to study very closely
the operation of a surplus revenue, applied to the
purchase of stock. He was, necessarily, devoid of
much of the information which we now possess :
he had before him no example of a measure tend-
ing, by unnatural interference with the rate of
interest, to send capital out of the country : still
less could he foresee the rapid increase of our
numbers, the surprising extension of our productive
Distinction between Stockholders. 309
industry, and the consequent motives for pursuing
a system, the reverse of that which maintains a
sinking fund — we mean, bearing light on the pre-
sent generation, and transferring a portion of tax-
ation to their less burdened successors.
If these remarks are at all useful in correcting
popular misapprehension, we shall hope somewhat
of a similar result from the following paragraphs,
relating to the situation of different classes of
stockholders.
Stockholders : Distinction between Permanent and
Temporary Depositors. — Those of our countrymen
who have travelled and paid attention to topics of
this nature, must have remarked that in France,
Germany, Spain, in short, in every country on the
continent, except Holland, the public funds are
comparatively little resorted to as a deposit for
private property. The governments have not as
yet acquired the confidence attached to a represen-
tative assembly, and the inhabitants are little ac-
quainted with the security conferred on property
by public register, the power of transfer, the steady
observance of good faith towards the public cre-
ditor. Continental lenders require the visible,
and, as they account it, solid security of land and
houses. Such, a century and a half ago, was the
case throughout England generally, and such, in
no small degree, was the case in the provincial part
of the kingdom at the beginning of the late war.
The general ardour of our countrymen in the con-
test, their confidence in government, and the com-
paratively high interest then given by the Treasury,
led to the deposit in that ready absorbent, of sums
which would have startled the caution of our fore-
fathers. The result of the whole is, that funded
x 3
310 Our Finances ; Distinction of
property so insignificant in a former age, when
compared to the general wealth of the kingdom, is
now of a magnitude approaching to the value of
our land, particularly if we estimate it not by ca-
pital, but (see p. 249.) by income.
Annuitants on our public funds, instead of
being confined, as in the last age, to London,
Bristol, and a few of our principal towns, are now
found in every district, and in every variety of
occupation. The great majority of them are per-
manent depositors, strangers to the manoeuvres of
the Stock Exchange, speculating neither on buy-
ing or selling, and attentive merely to the half-
yearly receipt of their dividends. These persons
consider the stocks as a fund permanently eligible
for themselves and their families, confiding, on
the one hand, in the good faith of parliament, and
aware, on the other, of the serious drawbacks at-
tendant on property in land and houses, — the dif-
ficulty of collecting rents, the heavy charge at-
tendant on transfers. The funds, they are aware,
involve neither delays nor lawsuits, while, with a
view to bequest, they admit of an easy and direct
repartition. It is in results such as these, that
we recognize all the advantage of established in-
stitutions, of the steady observance of good faith
on the part of government. Viewed in a national
sense, they render a people capable of efforts such
as those which maintained the independence of
Holland against the successive attacks of Spain,
England, and France : — Viewed in regard to the
individual, they offer a mode of investment almost
as much superior to that of the circle of private
connexion, as is afforded by Saving Banks, when
compared with the precarious deposits to which
the lower orders were formerly accustomed to
trust their petty savings.
permanent and temporary Stockholders. 31 1
What proportion do these persons, the perma-
nent depositors in our funds, bear to the body of
stockholders at large ? Not less, we believe, than
Jbiir-jifths of the whole, whether we look to num-
ber or property. The temporary depositors, how-
ever, few as they are, fill a more conspicuous
place in the public eye : it is they who bustle on
the Stock Exchange, who confer with the Chan-
cellor of the Exchequer, and who come forward
to bear a part with other capitalists in our loan
contracts. But these persons consider the funds
merely as a transient property, a security in which,
as in Exchequer Bills or mercantile acceptances,
they may vest a floating sum until the occurrence
of a more eligible mode of appropriation. Their
calculations as to the price of stocks go no farther
than the month or the quarter which may elapse
ere it suit them to withdraw their money, for the
purpose, perhaps, of transferring it to the funds
of the United States of America, France, or the
lesser Continental powers. Merchants, it has
long been said, are citizens of the world, but of
all mercantile men, such is particularly the case of
temporary stockholders, to whom London, Am-
sterdam, and Paris, present but one vast exchange.
How different this from the permanent depositor
who exhibits so many characteristics of the re-
tired capitalist, of the inheritor of real property,
preferring British security, even at a reduced in-
terest, and not seeking to escape his portion of
sacrifice, when satisfied that it is conducive to the
general relief. These persons are much more in-
terested in preserving than in acquiring ; their ob-
ject is not a rise of price for the purpose of sale, but
perfect regularity in the payment of the interest.
x 4
Our Finances ; Distinction of
This disposition has been strikingly exemplified
in the late reduction of the five per cents., of which
not a fiftieth part has been sent out of the country,
notwithstanding the great temptation offered by
foreign funds. And if in the three per cents, the
permanent depositors do not surpass the tempo-
rary in so great a proportion, they form, even in
these, beyond all comparison, the majority.
With what view, it may be asked, do we enter
into this discrimination of temporary and perma-
nent depositors ? Partly because it is little under-
stood, but more for the purpose of showing the
unimportance in a national sense, of the class who
corne forward as the representatives of the fund-
holders at large. It follows, that any measures
that may be taken in regard to the funds, should
be adapted to the unobtrusive, we may almost say,
the silent majority of stockholders. Persons cir-
cumstanced as they are, can desire no aid at the
expence of the community ; no addition to the
market price of stock, except such as shall natu-
rally arise from the continuance of peace, the
growing abundance of capital. — An artificial prop,
such as the sinking fund, they will not hesitate to
forego, when apprized, that in peace, it is of in-
jurious tendency, and ought never to be consi-
dered in any other light than as one of the
ingenious schemes by which the financier, in a
season of difficulty, seeks to stimulate the avidity
of capitalists, and to provide for the calls of the
Treasury, without an extravagant sacrifice.
After these preliminary explanations and the
removal from the mind of the reader of certain po-
pular impressions, we shall proceed with advantage
to our farther propositions. In these we fortu-
permanent and temporary Stockholders. 313
nately have the support of official example, the
last session of parliament having produced a con-
siderable change in the measures of ministers.
Till then, whatever might be the merits of our
rulers in regard to foreign politics or commercial
regulations, their financial arrangements had ex-
hibited little that could be satisfactory to the
political economist, discovering, apparently, no
sufficient discrimination between a state of war
and peace, in regard to the power of bearing
taxes, — no adequate impression of the superi-
ority of our prospects to those of our neighbours.
The measures which they had previously adopted
seemed to proceed from the suggestions of merely
practical men — of men accustomed to estimate a
financial proceeding by its effect on the Stock Ex-
change, on the mere monied interest, rather than
on the productive industry of the country at large.
At last was brought forward, unexpectedly, the
plan for exchanging life-interests in half pay and
pensions for long annuities ; a plan, which, since
the moment of its announcement, we have con-
sidered indicative of consequences beyond the
anticipation of the public. Its temporary failure,
or as we trust we may say, the delay of its suc-
cess, was probably owing to the engagement being
brought before the public on too extended a scale :
though the annual payments were small, their dura-
tion was such as naturally to startle men not yet
apprized of all the reasons which strengthen our
expectation of continued peace. But whatever be
the views of those who conceived this measure, or
their feeling after a first disappointment, our con-
fidence in it is unshaken, connected as it is in
principle with considerations on which we build the
hope of farther and extensive relief.
314 Our Finances ;
Difference in the Nature of our Resources since
the Peace. — It was in 1797> in the fourth year of
the war, that circumstances pointed out to Mr.
Pitt, the necessity of a radical change in his
financial plans — >the substitution of war taxes for
loans. The length to which the latter had been
carried, exceeded the disposable funds of the
monied interest ; while, on the other hand, the
increase of productive industry, the rise of wages,
salaries, rents, all concurred to strengthen the
hope of supply from taxation. Mr. Pitt seized
the distinction with his usual promptitude, and
erected on it a structure, the eventual magnitude
of which, proved one of the wonders of the age.
What concurrence of circumstances enabled him
and his successors to carry taxation so far ? Dur-
ing the war, our capital and labour had ample
employment : the competition from abroad on the
part of foreigners, or what might have proved far
more formidable, our emigrating countrymen, was
wholly out of the question. The transfer of Eng-
lish capital to the continent was prevented, as
well by a dread of lawless conduct on the part of
the French government, as by the profits realized
at home. Since the peace, circumstances are en-
tirely altered ; the competition of foreigners is to
be dreaded ; capital has been placed in foreign
funds, and emigration, had not the price of provi-
sions fallen among us, might have been carried to
a ruinous length. The profit of stock, the wages
of the lower classes, the emoluments of the higher,
all incomes, in short, except those of the fixed
annuitant, are, and have long been at a low rate ;
pointing as much to the necessity of reducing tax-
ation in peace, as our situation during war indi-
cated the practicability of its increase.
Plan of M. Necker. 315
Plan pursued by M. Necker. — The financial
concerns of France, have been, in general, ill
conducted, and taxation has, time immemorial,
been a subject of complaint among a people whose
national character is far from querulous. This
was more particularly the case in the latter years
of Louis XV., after winding up the arrears of the
inglorious war concluded in 1768. The 18,000,000/.
constituting, at that time, the clear produce of
the taxes of France, were levied in so awkward and
circuitous a mode as to cost 4 or 5,000,0001. in
the collection, and a sum perhaps equally large in
the injury arising from the obstructions which it
caused to the free course of industry. Different
provinces in France were subject to different im-
posts; the frontier lines were discriminated from
each other by custom-houses like the boundaries
of distinct kingdoms ; the transit of merchandize
was taxed ; the douamers or custom-house officers,
multiplied beyond all due proportion. At that
time, as at present, the taxes on consumption
were comparatively small, and a great part of the
revenue arose from a land tax similar in its nature,
but more unequal in its collection than the present
Fonder.
M. Necker, the first real financier whom France
had seen for a century, received his official ap-
pointment in 1776, and had hardly begun to intro-
duce order into this chaotic mass, when, in 1778,
the course of circumstances caused the French
court to depart from its pacific policy. The humane
character of Louis XVI. and the necessity of con-
tinned economy, were strong arguments for the
preservation of peace, but the cause of the Ameri-
can colonists, when opposed to England, could
not be otherwise than popular while the French
316 Our Finances ;
had fresh in recollection, a war in which we had
struck such fatal blows at their navy, and deprived
them of so many Trans-Atlantic possessions.
Louis and his ministers were thus obliged to yield
to the public voice ; fleets were to be equipped,
and considerable expence to be incurred.
M. Necker, aware that at that time the imposi-
tion of fresh taxes would be wholly unadvisable,
but that eventually the resources of France would
be more than equal to her burdens, conceived the
plan of meeting the new demands by annual loans,
for the interest of which, he made provision, not
by taxes, but by the abolition and reduction of
pensions, and of many unnecessary appendages of
the court. At that time, as at present, France
exhibited few sinecures of the first magnitude, but
an endless list of unmerited grants, of supernu-
merary offices, of unauthorized appropriations of
the public money. The confidence inspired by
the personal respectability of the minister, and
the prospect of great improvements in the fiscal
administration of France, induced the monied in-
terest on the continent to subscribe to the loans
of M. Necker, without the guarantee of a parlia-
ment, or the allotment of specific funds for the
payment of the interest. In this manner, he suc-
ceeded (Hennet on French Finance) in borrowing
1 5,000, OOO/. sterling, in three years, at moderate
interest, and would, doubtless, have conducted
the war .to its close, without a single impost, had
not circumstances led to his abrupt retirement
from office in 1781.
Does this example supply any inference applica-
ble to our present situation ? If the amount bor-
rowed by M. Necker, appear small, it was far
froiri small when we consider the limited resources
Comparative Taxation of England and France. 317
of France. Then, as at present, her towns were
neither numerous nor large : the majority of her
inhabitants were scattered over rural districts ;
her manufactures were adequate only to home
consumption ; the increase of her population
was slow. How different the present state and
prospect of productive industry in this country,
possessed as it is, of rich mines, extensive water
communication, abundant capital, — the whole with
a population rapid in its increase, and formed to
habits of business. With such auxiliaries, is it
going too far, to ask, whether we are not justified
in looking to the future with the confidence ex-
emplified by M. Necker, especially as in one ma-
terial point we may reason with a confidence greater
than he could feel, — we mean the prospect of con-
tinued peace.
Comparative Taxation of Great Britain and France.
GREAT BRITAIN AND IRELAND*
Computed for 1823, after deducting the taxes on salt, leather,
and malt, lately reduced.
Gross amount, inclusive of the expence of collection.
Assessed taxes £6,500,000
Customs 11,000,000
Excise 27,000,000
Stamps 6,800,000
Land-tax 1,200,000
Post-office (nett amount) 1,400,000
Crown lands 200,000
All other government receipts - - 1,900,000
56,000,000
Tithe - 4,000,000
Poor-rate, after deducting the portion
paid (seep. 195.) in lieu of wages - 5,000,000
Total - 65,000,000
318
Our Finances ;
FRANCE.
Gross Amount, inclusive ofExpence of Collection.
Fonder, or land and house-tax
Mobilier, a farther house-tax; also the window
tax, and the patentee or tax on professions -
Customs
Excise ; viz. duties on salt, tobacco, snuff, wine,
spirits, beer, and some lesser articles, the
whole comprised under the name of droits
reunis -
Stamps ; viz. enregistrement, domaine et timbre
Post-Office (nett receipt)
Sale of wood from the public forests -
All other receipts and contingencies, including
a large municipal revenue collected from
octrois, and other charges borne by the in-
habitants of towns -
Equal, after adding twenty per cent, for the
greater value of money to -
Sterling.
£9,000,000
3,000,000
2,300,000
9,000,000
6,000,000
600,000
800,000
6,300,000
£37,000,000
4-5,000,000
In this table of comparative taxation, the chief
distinctive feature is the magnitude of our excise,
customs, and assessed taxes, the proportion of
which to the same taxes in France is as 45 to 20.
Nothing can show more clearly the greater ability
to pay on the part of a commercial community,
of which so large a proportion are resident in
towns, a circumstance, conducive equally to ease
of collection on the part of government, and to
free consumption on that of the public. Hence,
the magnitude of our receipts on spirits, beer, tea,
sugar, wine, fruit ; on certain articles of dress, as
silk ; or on that which more immediately marks
Comparative Taxation of England and France. 319
a mercantile society, postage. Nothing, at the
same time, lessens more the weight of an argu-
ment, frequently brought against our taxation,
but the aid of which we disclaim, viz. that when
computed at so much a head, it amounts to
more than twice the average capitation of our
neighbours.
Corn Laws. — These indirect imposts have in
particular years formed an addition to our burdens
greatly beyond the amount paid by the landed in-
terest for tithe and poor-rate : at present, however,
the case is so different, that in our table we have
avoided noticing their operation, and have pre-
ferred introducing the amount of the charges
which they were intended to counterbalance. In
France there exist restrictions on the import of
foreign corn, but they are of little consequence
in a country where the growth is, in general, fully
equal to the consumption, particularly as the im-
port becomes free as soon as the average of wheat
of home growth approaches to 50s. the Winchester
quarter.
The object of the preceding tables is to draw
with distinctness and precision, that which is so
often attempted in a loose and exaggerating man-
ner— the line of comparison between this and
other countries, our competitors in the sale of
manufactures. Without subscribing to the opi-
nion of the Agricultural Committee of 1821, (Re-
port, p. 22.), that the taxation of other countries
compared to their resources is as high as our own,
our statement will probably be instrumental in
modifying a very general impression of an opposite
320 Our Finances ;
nature ; viz. that our burdens exceed those of our
neighbours, to a degree which, in a manner, baffles
all hope of approaching to an equality. Far from
joining in this discouraging view of our situation,
we are inclined to augur very favourable results
from a perseverance in the course of reduction
lately adopted by ministers.
Reduction of Taxation. — To draw the line of
distinction between the necessaries and super-
fluities of life, between the greater or less injury
arising from taxation to productive labour, is a
task of great nicety. There can, it is true, be
little doubt that imposts such as those on leather,
candles, green glass, bricks, tiles, soap, starch,
coal, are direct burdens on industry ; charges
which must cause either an addition to wages or
a deduction from the profits of stock. On the
other Hand, it may happen that imposts, the least
exceptionable in the view of individuals, may, on
the ground of fiscal calculation, have the earliest
claim to diminution. Thus, \vine, spirituous
liquors, and lace, appear fair objects of high tax-
ation, but if the duty be so great as to hold forth
to smugglers a premium such as enables them
to prosecute their business in spite of all the vigi-
lance of our cruisers, an abatement of duty may
be found an indispensable alternative. The ques-
tion of priority in the claim for reduction must
thus be considered as undecided, and left to the
determination of government ; but as general
reasoning is but half intelligible when unaccom-
panied by a specific statement, we venture, chiefly
for the sake of illustration, to lay before our
readers the following selection.
Reduction of Taxation.
Taxes which bear, more or less directly, on the
comforts of life, or interfere more or less directly
with the extension of productive industry.
Assessed Taxes -
£6,500,000
Cotton Wool
500,000
Malt and Beerl
Paper -
400,000
since the late >
6,500,000
Glass
400,000
reduction )
Candles
300,000
Stamps
6,500,000
Bricks and Tiles
300,000
Suj^ar .--
3,000,000
Stone and Slate 1
Tea -
3,000,000
carried coast- >
35,000
Timber
1,000,000
ways j
Coals carried 7
coast ways j
900,000
Auction Duties
Hemp -
240,000
200,000
Soap - * -
900,000
Starch
50,000
The whole forming a sum of nearly 31,000,000/.
on which we shall suppose, either by a repeal
of specific taxes, or by an abatement of 20 per
cent, on the whole, a reduction of - .€6,200,000
This added to reductions already made, viz. in
the horse-tax, malt, salt, leather, and tonnage, 3,800,000
Would form a total of 10,000,000
But as an increase of consumption may be anti-
cipated, as well from the reduction of prices,
as from our growing population, we calculate
the absolute loss or diminution of revenue
at less than - - 8,000,000
Of which already provided for by the reduction
of the five per cents., and of the half-pay and
pension list - 4,000,000
Leaving to be farther provided for, by annual
loan, or otherwise - 4,000,000
How far, in our present situation and prospects,
would it be expedient to follow the example of
M. Necker, and to substitute an annual loan of
4,000,000/. for a corresponding reduction of tax-
ation ? This inquiry may be said to form the
definitive object of our labours, and involves con-
siderations of great interest.
Our Prospect of increased Resources. — We
have already expressed (p. 244.) a belief that if we
Y
Our Finances;
can so conduct our affairs as to get over a few
years of difficulty, our financial prospects would
brighten beyond those of any other country. This
opinion may require explanation, since, in the
belief of some of our countrymen, we have arrived
at that point beyond which we can hardly expect
to carry either our numbers or our wealth. Their
apprehension, however, will be found to require
no lengthened refutation, and is noticed here
chiefly to satisfy those persons, necessarily nume-
rous in a commercial country, who, immersed in
their respective occupations, have little means of
generalizing or of reasoning from the past to the
future. The fact is, that our improvements, whe-
ther in agriculture, manufacture, or navigation,
are at present no more arrived at a limit, no more
threatened with obstacles to their farther progress,
than they were a century ago. A negative im-
pression of this nature was general thirty years since,
yet no age has been so fertile in discovery, in in-
vention, in increase of productive power ; and hap-
pily no country possesses, either in its physical or
moral resources, greater means of continuing the
career of advancement. If during the war the ex-
tension of our productive industry was great, how
much more likely is it to be so in peace, when the
capital and labour of which so large a portion was
directed to military purposes, are bestowed on ob-
jects of permanent utility. The two great ano-
malies of our inland situation, poor-rate and tithe,
can hardly fail to yield to the intelligence of the
age ; and their removal would go far towards heal-
ing the wounds of the suffering portion of the
community.
To bring our calculation to a point, — what an-
nual sum may we consider as likely to be added to
Our Prospect of increased Resources. ,SiJ;J
our national revenue, in a season of peace ? This
it is no easy matter to reduce to a specific form,
but after establishing (p. 227.), the intimate con-
nexion between population and wealth, we may,
we trust, on very safe grounds, assume the in-
crease of numbers in England and Scotland,
(leaving Ireland, at least the cottagers of Ireland,
out of the question), as the ratio of the increase
of our taxable income. Such certainly may be
taken for granted, when the reduction of taxation,
commenced in the present year, shall have been
carried somewhat farther, removing the chief part
of the extra pressure on our national industry,
and placing it, in regard to public burdens more
nearly on a level with that of our continental com-
petitors.*
We proceed to exhibit the result in the form of
arithmetical computation. First as to our num-
bers : — instead of requiring our readers to assent,
to the probability of an addition annually augment-
ing, we shall confine ourselves to that which is
past and ascertained ; viz. the individuals born in
* To give the reader a complete view of our fiscal burdens,
we subjoin the following, which are left out of the text, as
Taxes which appear to interfere less with our productive in-
dustry.
Post-office
Foreign spirits, 1
chiefly brandy j
British spirits
Licences for pub-)
licans, &c. j"
Tobacco and |
snuff (Excise) j
Tobacco (Customs)
Coffee and cocoa -
Rum
Silk, raw and thrown
East India piece )
goods \
Various other duties 3,000,000
: 1,400,000
Printed goods 1
2,300,000
(home manu- >
facture) )
£570,000
3,000,000
Foreign linens
80,000
700,000
Foreign butter 1
and cheese j
100,000
2,400,000
Tallow
Raisins and other 1
100,000
600,000
fruits j
400,000
300,000
200,000
Barilla and other")
drugs \
150,000
500,000
Pepper
150,000
100,000
Skins and furs
Mahogany
T 7 • 1 1 . .
50,000
50,000
324
Our Finances ;
the early part of the century (1802, S, 4.), who
are now entering, year after year, on the age of
productive labour. Then as to the fruits of their
labour, represented in the form of money, we have
already (Appendix, p. 76.) calculated the annual
addition to our national income from that source
at 3,000,000/., and as our taxation, even on a
reduced scale, will exceed 20 per cent, on our
income, the consequent addition to our revenue is
above 600,000/. But here also we shall make
a large abatement, and call the addition in question
only 400,000/.
Computation of the Increase of National Income from aug-
mented Population, assuming such Increase at a£400,000 a year.
Years.
Annual Increase
of the Produce
of Taxes.
Years.
Annual Increase
of the Produce
of Taxes.
1823
£ 400,000
1837
£6,000,000
1824
800,000
1838
6,400,000
1825
1,200,000
1839
6,800,000
1826
1,600,000
1840
. 7,200,000
1827
2,000,000
1841
' 7,600,000
1828
2,400,090
1842
8,000,000
1829
2,800,000
1843
8,400,000
1830
3,200,000
1844
8,800,000
1831
3,600,000
1845
9,200,000
1832
4,000,000
1846
9,600,000
1833
4,400,000
1847
10,000,000
1834
4,800,000
1848
10,400,000
1835
5,200,000
1849
10,800,000
1836
5,600,000
1850
11,200,000
This increase supposes neither new taxes or im-
proved circumstances on the part of those who
pay them : if the latter merely escape deterior-
ation, the increase of numbers, the acquisition of
the additional labourers in the productive field, will,
by the augmented consumption of taxed articles,
make the computed addition to the revenue.
Our Prospect of increased Resources. 325
If it be accounted somewhat confident to anti-
cipate so regular an increase from the mere aug-
mentation of our numbers, we shall call in an
auxiliary of another kind, — the effect of diminish-
ing expenditure. Economy is evidently the wish
of ministers, and the rising value of money bids
fair to enable them to carry reduction considerably
farther, without injury to the individuals reduced.
What is, in this respect, the effect of the late re-
peal of 4,000, OOO/. of taxes ? To lower prices ; to
bring money more nearly to the value it had in
1792 ; to render Q5l. in the present year equivalent
to 100/. two years ago. Much, it must be allowed,
remains to be done ere the long list of charges,
rent, wages, professional attendance, &c., which
constitute domestic expenditure, can be brought
to their due level, or before persons, either of high
or of middle rank, in the receipt of fixed incomes,
can be made to feel what is due to the suffering part
of the community : but the course of circumstances
cannot be resisted, and a continuance of peace
must be followed by a diminution of money Income
in almost every station, whether public or private.
Probability of continued Peace. — It will be in
the recollection of our readers, that on 29th April
last Lord Londonderry dwelt strongly on the im-
probability of our being again called on to bear a
part in war, on a scale at all similar to that of our
late contest. Had the reserve of office permitted his
lordship to express himself at large, he might, we
believe, have given the most conclusive arguments
for this opinion, avowing that the magnitude of
our loss was unperceived at the time it was incur-
red \ that ministers, had they comprehended its ex-
tent, would have followed a much more cautious
y 3
326 Our Finances ;
course, and that no consideration should again
prompt them to the once-popular system of vigour.
Adverting to the late war, we find that never did
a contest close with more success in its main ob-
jects— the change of government in France, and
prospect of permanent tranquillity in Europe ; while,
as to territorial acquisitions, it rested with us to
retain or give back whatever suited our policy.
Could we imagine circumstances more calculated
to heal the wounds of protracted warfare, or to
prevent that distress in which we have, notwith-
standing, been so deeply involved. After such dear-
bought experience, is it probable that our govern-
ment will be easily led to act an aggressive part ; or
is not more likely, that the creed of our rulers,
will, in future, be similar to that of our cabinet,
when guided by Sir R. Walpole, — to that which
Holland has for ages been anxious to exemplify ?
How far is this pacific prospect confirmed by
the situation of foreign powers ? The United States
of America, passed in February, 1821, an Act for
reducing to one half, an army which already was
far from numerous ; and the building of ships of
war, prosecuted only in compliance with a momen-
tary enthusiasm, is now also relaxed. Next, as to our
great European rival, France is no longer to us
the France of Louis XIV. or of Bonaparte : not
only is her national power comparatively very dif-
ferent, but the springs of court intrigue, the hazard
of secret influence on the executive branch, are
checked, as in this country, by the freedom of par-
liamentary discussion. If it be urged, however,
that the nation, though inclined to peace, might
be misled by some ambitious ruler, and that in the
varying scene of European politics, there might
arise contingencies calculated to draw France into
Causes of War. 3l>7
a war, let it be remembered, that her internal
situation affords the strongest motives for continued
peace. Her population is in a more divided state,
the preservation of her present government less
assured than was the case in England a century ago,
when, the Hanoverian family being recently set-
tled on the throne, it required a steady adherence
to pacific policy to prevent a rupture, of which the
result might have been, that the regal prize would
have been fought for on British ground.
Causes of War. — On taking a retrospect of our
history, we shall find that several of the most po-
pular as well as most substantial grounds of -war,
have ceased to exist. This country began to take
an active part in continental politics nearly a cen-
tury and a half ago, a time when France was so
preponderant, that during the reigns of .William
and Anne, continued exertion was necessary, to
preserve the independence of Europe. The wars
of 1740 and 17^6 owed their origin chiefly to the
contending interests of Austria and Prussia. If
these no longer furnish a probable ground of war,
still is it less likely that we shall be involved in any
contest for colonies such as that of 177«5, or in an
attempt to regulate the government of our neigh-
bours such as that which called Europe to arms
in 1793. Those views in politics, that conviction
of the barren nature of military trophies, of the
substantial fruits of peace, which were so long
confined to the philosophic reader of history, have
at last reached our cabinet, and have influenced
it since 1812, to a degree greater than is generally
known. The restrictive laws so long connected with
our colonial system, have now ceased to fascinate
our rulers, and will soon cease to fascinate our nier-
Y 4
328 Our Finances ;
chants. Our Board of trade is engaged in expung-
ing from our commercial code, the acts most offen-
sive to foreigners : it no longer listens to schemes
of monopoly, or seeks to found our commercial
prosperity otherwise than in concurrence with that
of our neighbours. The discovery of the real
causes of national wealth, has shown the folly of
wasting lives and treasure for those colonial pos-
sessions, which, during last century, in the reign of
the mercantile theory, were accounted the chief
sources of commercial prosperity. It is now above
forty years since the United States of America
were separated from us, and since their situ-
ation has afforded a proof, that the benefit of
mercantile intercourse may be retained in all its
extent, without the care of governing or the ex-
pence of defending these once-regretted provinces.
Mexico, Peru, Chili, Brazil, the regions so much
coveted by our forefathers, are now open to every
flag, and never likely again to become, on com-
mercial grounds at least, a cause of wan
Is it necessary to add arguments to show the fal-
lacy of expecting from war the gratification of
either political or commercial ambition ? If we look
to France, we find her, after long considering her-
self the mistress of the continent, brought back to
her ancient limits : if we look at home, we find our
countrymen, after believing that our naval supe-
riority, our conquests in the east and west, had
brought us unparalleled wealth, have made the
mortifying discovery that our burdens far exceed
our acquisitions, and that the only substantial ad-
dition to our resources, (augmentation of numbers,)
has had little or no connexion with a state of hos-
tility. Frederic II. of Prussia afforded perhaps the
most striking example of success arising from war
How far is Taxation a Cause of Distress ?
in the course of the 18th century, having acquired
by it, in the first instance, Silesia, and eventually
part of Poland : yet whoever will calculate, on the
one hand, the amount of his sacrifices, on the
other, the natural progress of population and
wealth during so long a period as his reign (forty-
five years), will find that the increase of his power
would have been fully equal, had he confined him-
self to the plain and direct course of remaining
in peace and improving his hereditary dominions.
To follow up such a course, to surmount our
financial difficulties, and to heal the wounds of Ire-
land, are, doubtless, the objects of our government.
When these grand points shall be attained, the
magnitude of our resources will be so evident as
to dispel all apprehension of attack, not only on this
country, but on the independence of the Nether-
lands, the maintenance of which seems now to form
the only sufficient ground for our interfering in a
continental contest.
How far is Taxation a Cause of Distress ? — The
primary cause of our difficulties since the peace
was, doubtless, as explained in our third chapter,
the magnitude of the transition, the suspension
of government expenditure, and the consequent
over-stock of hands. That such would have been
severely felt under a taxation as slight as that of
Switzerland or the United States of America, ad-
mits of no doubt ; but it never would have reached
such an extent, or continued until the eighth year
of peace, had not our public burdens, and conse-
quently the expence of living, been higher than
among our neighbours. Emigration and the ex-
port of capital would, in that case, have been com-
paratively inconsiderable ; and, in both respects,
330 Our Finances ;
additional means of promoting productive industry
would have been retained at home.
Having no wish to press our arguments to an
extreme, we disclaim without hesitation the aid
of certain popular notions, such as that " a taxed
commodity after passing through three or four
different hands, is enhanced by 20 or 30 per cent,
charged by the dealers for their advance on the
tax." We know too well the slender profit of
either wholesale or retail business, to give credit
to such loose assertions ; a dealer is in general
satisfied with a charge of 2 or 3 per cent, on
his advance, so that this argument, though not
undeserving of attention, has no claim to a pro-
minent rank in the objections to taxation. These
will be found sufficiently serious without the aid
of exaggeration : our high duties tend, doubtless,
to raise our prices above the currency of our
neighbours, and we have the sanction of Dr. Smith
for saying that " a rise in the money price of com-
modities, when peculiar to a country r, tends to dis-
courage more or less every department of industry
carried on within it, enabling other nations to
undersell it, not only in the foreign but in the
home market."
To this opinion we subscribe in the words of
its author, after all the qualifications of it whicli we
have heard from practical men, or read in the pub-
lications of the political economists of the day. We
have to add to it, that the unseen injury arising from
taxation, its interference with the free course of
manufacture, is (Evidence of Distillers before the
Sugar Distillery Committee, in 1808,) much greater
than is suspected by the public. To take an il-
lustration familiar to those who transact business
as underwriters, and who know the extent of the
How Jar is Taxation a Cause of Distress ? ;3o 1
reduction produced by peace in the terms of in-
surance. To a war premium of 6, 8, or 10 per
cent., a policy duty of -}- th per cent, on the sum
insured formed an addition of little conse-
quence, but when premiums were lowered to 2 or
3 per cent., it was found a heavy proportional
charge, and afforded an inducement to foreign
merchants to effect their insurances at Hamburgh
and other ports, where the duty is comparatively
light. The consequence is, that the reduction of
our policy duty in the present year, has in some
degree, come too late.
Ship-owning, which was often a losing invest-
ment of capital during the war, has been doubly
so since the peace, and can hardly prove other-
wise, until by reducing the attendant charges, we
shall enable our builders, our rope-makers, and
others, to meet foreign competitors on equal
terms. Navigation does not, like home trade,
admit of con troul by interior regulation : its scene
of competition 5s the ocean, and success in it
can be attained only by a clear superiority over
foreigners. Countries possessing forests of ship-
timber in the vicinity of a harbour or navigable
river, enjoy already one great advantage ; to ag*
gravate its effect on our building and shipping in-
terest by the retention of heavy duties, is to place
them on a footing of inferiority feebly counter-
poised by our custom-house regulations and our
tonnage duty on foreign vessels. A reduction of
the duty on foreign timber and hemp, seem in-
dispensable preliminaries to our successful compe-
tition with our Baltic neighbours, — a competition
which would not then be hopeless, when we con-
sider the superiority of our workmen, and the
great fall both in the price of their maintenance,
332 Our Finances ;
and in the conveyance of foreign produce to our
shores.
It would be easy to multiply examples of pres-
sure from taxation, but there can, we believe, be
little doubt on two important points : " that tax-
ation is felt by the public, more now than during
the war ; and in England, more than on the Con-
tinent." After all the additional means conferred
by our navigation, our extent of town-population,
and our superior agriculture, the payment of
67,000,000/. or even 65,000,000/. a year, must bear-
harder on the national income of this country than
45,000,000/. (see p. 318. of this chapter) on that
of France. On the Continent, the evils of tran-
sition have not been altogether so serious ; the
failures among merchants and manufacturers have
been less numerous ; while among agriculturists
the decline of price, much as it is complained of,
has not, when compared to ours, exceeded the
proportion of 50 to 70 per cent.
How far would a Reduction of Taxation be pro-
ductive of Relief? — We have supposed in the
preceding pages, a reduction of taxes which, joined
to the remission already voted, would form a total
abatement of 1 0,000, OOO/. Were that abatement
directed in toto to some specific branches of in-
dustry, such as manufactures connected with the
use of articles like leather, coals, timber, there
seems little doubt that, though productive at first
of a derangement of work, the stock of employ-
ment eventually created would supply that which
in our years of distress was our principal de-
sideratum, — a sufficient demand for labour. We
shall suppose, however, that our public men are
not agreed in regard to the farther taxes to be
Reduction of Taxation. 333
repealed, and that the 6,000,000/. of which we
contemplate the reduction, must be abated in the
form of a per centage on the revenue at large.
To avoid complexity we shall suppose this the case
with the whole reduction of 10,000,000/., and pro-
ceed to ask, what would be the result of such
abatement to the individual ? A diminution of
charge to the extent of 5 per cent, on his expen-
diture, — an object of no great consequence, it is
true, to the land-holder, the retired capitalist, or
any person out of business ; but one which in the
hands of the productive labourer, the merchant,
the manufacturer, or the farmer, would form an
engine of great efficiency. The saving, (see our
table, p. 249.) would be felt on the total dis-
burse — on the wages of workmen and the
salaries of assistants, as well as on that proportion
of income which is more strictly a return for the
personal exertion of the master.
Such would be the effect of reduced taxes on
the individual : what, in the next place, would
be their operation on the community at large ?
An abatement of 5 per cent, on our taxable in-
come, is equivalent (see p. 246., and Appendix,
p. 80.) to 3 or 4 per cent, on our annual produce ;
that is, that our woollens, our cottons, our hard-
ware, might in such a case be sent to foreign
markets 3 or 4 per cent, cheaper than at present.
To those who have a due sense of the smallness of
mercantile profit, (Speech of Mr. Baring, 15th July
last,) even this limited reduction will appear of
great importance, enabling us to compete with
our foreign rivals, the manufacturers of France,
Germany, and the Netherlands. To these, since
the inauspicious aera of our Orders in Council, we
must add the inhabitants of the Northern States
334 Our Finances;
of the American Union, the return of the State of
New York for 1821, exhibiting a value of 8 or
10,000,000/. sterling, (chiefly woollens and cot-
tons,) manufactured among a population of little
more than a million.
But our national industry is, it may be said,
already amply productive, whether in agriculture
or manufacture ; — the evil lies in a want, not of
produce, but of vent. In a season of peace, it
may be added, the grand source of apprehension
is over-stock, and our neighbours, whether Ger-
mans or Belgians, have long complained of the
free admission of our fabrics. This, however,
proves little more than that in certain branches
foreigners are unable to compete with us, and that
our rivalship, if continued, may, induce them to
give a different direction to a part of their labour
and capital, manufacturing commodities of which
we should probably become the purchasers, in
consequence of changes that would follow the
increased freedom of trade.
Add to this, that it by no means follows that
the addition to our manufactures from reduced
taxation, would be large, since the quantity pre-
pared, either by the loom or the plough, depends
mainly on the " aggregate number of workmen in
the country," a point in which, of course, no legis-
lative provision can effect a change of consequence.
It is a remarkable fact, that the quantity prepared
for a losing market is nearly as large as for a pro-
fitable one ; so great is the power of habit, the
necessity of following up an established trade or
profession. This result, so different from the
inferences of some political economists, is, doubt-
less, promoted by our poor-law system : it was
exemplified on the part of our manufacturers amid
Reduction of Taxation. 335
the continued distresses of 1819 and 1820 ; and ex-
periences at present a confirmation in the case of
our farmers.
Another fact of a more consoling character is,
that the surcharge of hands is less great than is
commonly supposed. To add a twentieth or even
a thirtieth to the existing demand for labour, in
other words to find employment for one liund red-
thousand individuals of the lower order, would,
we believe, prove a change completely satisfactory.
In harvest we have an opportunity of observing,
that the supply of labourers is not always too great,
and since the beginning of the present year, there
has existed no over-stock but in agriculture.
In the first years of peace, the distress of the
lower orders, arose from wages being insufficient
for their maintenance : since the fall of provisions
our object should be, not to raise wages, but to
relieve the poor-rate. In the higher departments
of productive labour, the source of complaint will
be found to lie in prices disproportioned to the
cost of production : the price of 55s. or 60s. for
wheat, insufficient as it appears at present, was
ample at the peace of Amiens, and will again be
adequate, if not ample, whenever wages and the
charges of cultivation generally, shall have been
lowered in proportion to the reduction in the
maintenance of the labourer or mechanic. It is
in fact a great consolation, that the more we ex-
amine our situation, the more we find ourselves
enabled to trace its evils to transition, derange-
ment and other causes of a temporary character.
A season of peace will not always be a season of
stagnation, and an increase of population, pro-
ducing consumers as well as producers, has no
tendency to over-stock. The order of Providence
336 Our Finances ;
evidently is, that the industrious should be at no
loss for employment. The interruptions to it have
arisen chiefly from causes of our own creation ;
and its renewal is less dependent than is commonly
supposed on an extension of foreign trade. The
old adage, that " England is England's best cus-
" tomer," will be exemplified with ample effect
whenever the course of circumstances shall restore
things to their level, and whenever the unnatural
effect of war, taxation, and corn-laws, shall be
removed.
Objections answered. — Various arguments may,
we are aware, be advanced as well by men in office
as others, against any considerable change in our
fiscal arrangements. Taxes repealed or modified,
cannot, they will say, be re-imposed. Charges
that have have interwoven themselves with our
habits ought not to be abruptly removed. To this
we answer that several of our taxes are such as
ought never to have been imposed, indicating, as
they do, the rudest state of financial science, and
betraying an almost total unconsciousness of the
check given by these burdens to productive in-
dustry. As to the question of re-imposition, we
have, happily, good ground for dismissing the ap-
prehension of retracing our steps, but, supposing
that such were to become, in some degree neces-
sary, the new taxes would be of an altogether dif-
ferent nature. A property-tax to the extent of
2£, perhaps 5 per cent., would, doubtless, receive
the sanction of parliament, in preference to a re-
vival of such duties as those on malt, salt, leather,
coals, or tonnage.
Next, as to the evils apprehended from transi-
tion,— from that state of change, which, to a nation
as to an individual, is always unprofitable and fre-
Expediency of an Annual Loan. 337
quently pernicious. Evils of that nature, would,
even on a diminution of our burdens, occur in a
variety of modes not anticipated by the public,
but their duration would necessarily be temporary,
and their amount might be lessened by various ar-
rangements, such, perhaps, as making our future
reductions consist less in an absolute repeal of a
few particular taxes than in a modification, a par-
tial diminution of a number; — a course which
might, besides, have the effect of relieving govern-
ment from much importunate solicitation.
Such are the arguments for a reduction of tax-
ation. Inconsiderable as the proposed abatement
may appear, no one can say how materially our pro-
ductive industry may be promoted by it : but were
immediate relief not to prove the consequence, we
should have at least the satisfaction of entering on
that path, which must eventually lead to a favour-
able issue. No one expects immediate advantage
from the modification made in our navigation and
corn laws in the present session : it can form only
an approximation to a better system, in like man-
ner as a diminution of taxes would bring us more
nearly to a level with the rest of the civilized
world, giving our manufacturers a fair chance in
the field of competition, relieving our annuitants
from the necessity of emigrating, and placing us
nearer to that equality of prices which would ad-
mit of unrestricted trade, and establish our pros-
perity on a solid basis.
Expediency of an Annual Loan in lieu of Taxes.
State of the Monied Interest. — Amidst all the
losses and complaints of late years, the monied in-
338 Our Finances ;
terest, that mixed body of bankers, retired mer-
chants and capitalists, have escaped the general
distress. Their situation has exempted them from
the fluctuations experienced by many other classes ;
by our agriculturists, our manufacturers, our ex-
porters of merchandize to the West Indies and
America. The monied interest comprises a num-
ber of old establishments, who conduct their busi-
ness more conformably to rule and calculation than
several other portions of the mercantile community:
they are strangers to the hazard of credit, and the
still greater hazard of distant markets. The cloud,
which, from the depreciation of our currency,
overhung them at the close of the war, has disap-
peared, and even the late reduction of interest
may be considered as innoxious to them, their in-
comes having gained in value what they have lost
in amount. The fact is, that they have at com-
mand a fund of ready money, which has caused
the rise in our stocks, so idly ascribed to a sinking
fund, and which has also afforded large supplies to
the exchequers of our neighbours.
Transmission of Capital to Foreign Countries. —
The interest of money is always highest in the least
advanced communities, and capital has conse-
quently a tendency to move thither, not rapidly, we
allow, but progressively : it is thus that at present
it begins to be withdrawn from England, exactly
as in the 17th and 18th centuries it was withdrawn
from Holland. The present year has been remark-
able for the extent of such transfers, and by wri-
ters who do not scruple to take an extra latitude in
a popular argument, might be made the ground of
a vehement appeal in support of the plan we now
propose, of exchanging a part of our taxation for
Expediency of an Annual Loan. 339
an annual loan. " Why/' it might be said, " should
we not apply to our own relief that periodical sur-
plus of capital which has for some years been trans-
ferred to foreigners." To this the advocate of
commercial freedom might answer, " You are
not at liberty to exercise any interference or to
divert capital from the direction which it natu-
rally takes : its transfer to foreign countries may
be, for aught you know, the most profitable means
of employing it in a national as in an individual
sense. The capitalist who, living in England, draws
a large income from the French or American funds,
is enabled to make a larger expenditure, to be a
more liberal contributor to the productive industry
of his own country."
Between these contending opinions what course
ought we to hold ? The argument of the political
economist would be excellent against any legal re-
straint which might exist, in the shape of a tax or
otherwise, on the transmission of capital abroad ;
a restraint which would be quite as absurd as the
lately repealed prohibition to export specie. To
this we may add, that had all the countries of the
civilized world one common interest, were the doc-
trine of freedom of trade generally adopted, we
should be inclined to look with a favourable eye on
the most unreserved transmission of capital. But
at present we are obliged to reason in a more nar-
row circle, and to calculate what peculiar aid we
can oppose to peculiar pressure. Our situation is
unfortunately anomalous ; our taxation higher than
that of any other country ; and if, as we have
reason to apprehend, its magnitude be such as to
reduce the profit of stock, and in that manner to
cause or to be likely to cause capital to leave us,
the objection of the political economist, however
340 Our Finances ;
true in the abstract, becomes, in a manner, lost in
the urgency of circumstances. The application of
general principles in regard to money transactions
is thus found to require no slight share of the
caution that has proved necessary in other depart-
ments — our corn trade, our navigation, our cus-
tom duties.
To explain our meaning by example. In 1815
the President of the Board of Trade was as fully
convinced as Mr, Horner, or any member of the
house, of the radical impolicy of our corn laws j but
while he regretted that they should ever have been
enacted, or that agriculturists should ever have
relied on so unnatural a support, he felt that any
change must be gradual, that the advantage from
a return to sound principle would be remote, and
the evils of transition immediate. The Agricul-
tural Committee of 1821 acknowledged, in like
manner, the benefit of free trade, but felt the in-
expediency of its early adoption : while in regard
to our navigation, the bills brought forward dur-
ing last session, for repealing the obnoxious part
of our statutes, experienced, as is well known, much
opposition and curtailment from the same cause.
After such examples we may be allowed to pause
ere we admit a complete latitude in regard to the
disposal of money. The principles of productive
industry, prescribe in the words of Vauban, que
r argent le mieux employe est celui que le roi laisse
enlres les mains de ses sujets — that government
should, if possible, avoid draining it from the
pocket of the individual in the shape of either a
loan or tax. Were it practicable to avoid both, we
should be reluctant to urge, or even to listen to
projects of advantage from anticipating resources,
however plausible under our prospects of increas-
Expediency tf an Annual Loan. J41
ing wealth. The question, however, has no such
scope, being unluckily confined to a choice of evils
— taxation or borrowing.
Yet even under circumstances of pressure, we
should beware of urging a transfer of burden to
the next generation, were their situation likely
to be as embarrassed as our own. But whether
we look to the increasing caution of our rulers,
the resources arising from improvements in our
national industry, or the diminution of burden by
its repartition among augmenting numbers, we
find reason to consider their prospects far superior
to our own. And though the assertion may be sin-
gular, it is, notwithstanding, true, that to relieve
ourselves from a portion of our burden, is an ef-
fectual method of extending the resources of our
posterity, inasmuch as the magnitude of the pre-
sent pressure by sending abroad the family of the
annuitant, and, as we fear, the money of the capi-
talist, operates to curtail the fund destined to be-
come in the hands of the next generation the basis
of national wealth.
Would the proposed Loan, affect the Rate of
Interest? — One of the chief features in the great
transition from war to peace, was an increase of
disposable capital, and it may well be made a
question, whether several years ago, government
would not have applied a more direct cure to the
national wound, by a demand on the monied in-
terest for a loan, than on the public for taxes. At
present, the proposition seems to admit of no doubt:
to take 4,000,000/. annually out of the money
market, would, doubtless, operate in some mea-
sure to retard the fall of interest, and the advan-
tage slow, but sure, which follows that fall ; but
z 3
342 Our Finances /
it would probably do so in a slight degree, whe-
ther we consider the present abundance of ca-
pital or the satisfactory prospects of our monied
interest. Three years have elapsed since pass-
ing the act for the resumption of cash payments
and the dread of scarcity of capital has proved
groundless. There seems, assuredly, no reason
to apprehend any early demand for money for the
payment of corn imports. And in as far as a loan
might lessen the transfer of capital to foreign funds,
there would, of course, be no ground of complaint
in this country.
Would it affect the Price of Stocks? — This
question we shall answer first on the part of the
public, and next on that of the stockholders.
Since the reduction of the five per cents., the pub-
lic appears to have hardly any greater interest in
keeping up the funds than in maintaining the price
of land, merchandize, or any other description of
national property. The only direct advantage
from a rise in the funds, would be the power of
reducing the old four per cents., and the farther
power of reducing the new four per cents., six
years hence. Any diminution of interest in the
great mass of our debt, the three per cents., is a
very doubtful and remote object : a result not
likely to ensue, until after a lapse of years and a
concurrence of circumstances which will, in all pro-
bability, materially change our financial condition.
But, whatever may be the probable time of the oc-
currence of such a power, there can be no doubt of
the impolicy of endeavouring to accelerate its ar-
rival, in regard to either the three or the four per
cents, by artificial means. The reasons against
such a course are even when briefly stated (p. 305)
Expediency of an Annual Loan. 343
so direct and substantial, as to render it incum-
bent on every well-wisher to his country to dis-
suade it ; and nothing prevents our enlarging on
the evils that would attend it, except a conviction
that ministers have definitively relinquished it.
Next, as to the effect of a loan on the interest
of stockholders. Dividing these into the two
classes of temporary and permanent depositors, and
considering the former as loan contractors, we
shall soon find that they may safely venture on
such a loan without the pledge of taxes. Four
millions, if borrowed at an interest of four per
cent., would involve an annual burden of 160,000/.
which, if the plan of a sinking fund provision for
each loan were retained, might be carried to
200,000/., a sum not insignificant certainly, but
not equal to half the addition that is annually
making to our revenue by the increasing consump-
tion of taxed articles. The security, therefore, is
such as was never offered on a war loan in the
most brilliant days of our finance.
Lastly, as to permanent depositors and the pro-
bable price of stocks for a series of years. What,
we ask, have been the causes of the slow rise of
stocks since the peace? The years 1814 and 1815
required heavy loans ; 1815 was a season of gene-
ral distress, but no sooner did our prosperity re-
turn in 1817, than stocks rose and continued high
during 1818, when the mismanagement of the
French loan, and, soon after, the effect of over-
trading in this country, produced a fall. These
causes, joined to the national disquietude during
a trial of unfortunate notoriety, delayed the rise
of stocks ; and a farther delay took place from an
apprehension that the magnitude of the agricul-
tural distress would necessitate a reduction of the'
z 4
344 Our Finances ;
public dividends. Since then, however, the re-
venue has materially improved.
Two points will be readily admitted by the per-
manent depositor in our funds ; first, that whatever
conduces to the national prosperity has a tendency
to raise stocks ; and next, that a loan for the pur-
pose of reducing taxes is altogether different in its
operation on his property from a loan for the pur-
pose of expenditure. By augmenting the value of
money it augments his income, and affords him a
substantial return for any reduction, or rather delay
of rise in the market price of stock.
Limitation to borrowing. — Were the plan of an
annual loan to be adopted, and found to answer,
what limit it may be asked, should there be to
our borrowing ; at what time ought we to suspend
our demand on our future resources? At the
time when our taxation shall have been brought to
a level with that of France and other countries,
our rivals in manufacture. If in these countries
the public burdens form 20 per cent, of the
national revenue, let the same be considered the
limit of taxation in England ; the point below
which we make no attempt to reduce it, satisfied
with the superiority given to our productive labour,
by our physical advantages, — our mines, and our
command of water communication.
Retrenchment. — Nor ought the adoption of this
system, though conducive to financial relief, by
any means to lessen the demand on the part of the
public for retrenchment : on the contrary, it would
bring with it a direct motive for reduction, the
effect of all abatement of taxation being to increase
the value of money ; to add to the emoluments of
the servants of the public. The allowance to
Prince Leopold, for example, has been impercep-
Expediency of an Annual Loan. 34-5
libly, but substantially increased from 50,0007. to
6'0,000/. by the fall in prices since passing the
grant ; and if taxes are further reduced, it will,
ere long, attain the value of 65,000/. It follows,
that a reduction to a sum representing the value
of 50,000/. at the date of the grant, might take
place without injury to the Prince, and without
deviating from the spirit of the act of parliament.
Have loans, in time of peace, been sanctioned
by the example of other countries ? As yet, only
by that of the United States and some Continental
powers who, seeking their supplies from alien ca-
pitalists, have no title to be held forth as an ex-
ample to England. But, had Holland in former
ages possessed the evidences of progressive increase
of population and income which at present hap-
pily belong to our country, her course would pro-
bably have been that which we recommend, and
without any departure from her habitual caution ;
for, if, in peace, wages, salaries, and profits are
lower, and the power of present payment less,
the labourers in the productive field are more nu-
merous, the results of their exertion far more con-
ducive to eventual prosperity. During the late
war, our national income was large but of uncer-
tain duration : at present, it is reduced in amount,
but much improved in prospect. If, in the former
case, it was politic in government to defray a large
share of the current expence out of our passing
gains, a different course is obviously suited to a
state of peace.
Of these, as of our previous suggestions (p. £89.)
it may be said that we propose to do nothing by
surprize, by contrivance, or by plausible calcula-
846 Our Finances ;
tion ; all may be gradual, voluntary, and open,
where necessary, to recall. From circumstances
beyond the power of foresight, a great pressure
has fallen on the present generation : it is proposed
to transfer a part of it to future years, but on a
plan that will leave those on whom it may devolve,
whether of the present or the next age, far less
burdened than we now find ourselves. How sin-
gular, that in all our distress since the peace, amid
all the schemes for our relief, none of this nature
should have been brought forward until the recent
proposition of the transfer of life interests into long
annuities. Had our finances been administered by
a man of the bold, inventive mind of Pitt, the
increase of our population and the connexion be-
tween it and the increase of taxable income, would,
ere this, have been made the ground work of some
decisive measure. Let it not be objected that such
was not his course during the period of his ad-
ministration that passed in peace, and that the
plan pursued for the support of our credit after
the American war, was the imposition of additional
taxes. At that time the increase of our numbers
was less rapid, and for want of regular returns,
was unperceived. The recent loss of our colonies
forbade the expectation of a progressive exten-
sion of trade, and there were few examples in our
history, of taxes repealed in the hope of stimulating
productive industry. Mr. Pitt pursued, therefore,
the only expedient within his knowledge, but had
peace been preserved after 1792, there can be
little doubt that the result of the favourable state
to which circumstances had brought our finances,
would have borne the stamp of his discriminating
mind, and of the example given, under circum-
stances somewhat similar, by Sir R. Walpole : it
Expediency of an Annual Loan. 347
would have been, not the support of the sinking
fund, to an extent that would have afforded an in-
ducement to send capital out of the country, but
the repeal or reduction of the taxes which inter-
fered most directly with productive industry, in
conformity to the course recommended many
years before by Dr. Smith.*
The period from 1783 to 1793. — No period of
our history, is, as far as regards our productive
industry, entitled to an equal share of our atten-
tion, the circumstances of that interval of peace
being, in many respects, similar to those of the
present time. Beginning in financial embarrass-
ment, our prospects gradually brightened, and
our trade flourished without the aid, as in a
period of war, of artificial causes : all was the
legitimate result of the application of capital and
industry to the improvement of our national ad-
vantages. Agriculture prospered without a rise
of prices ; the revenue increased, at least in the
latter years, without new taxes : labour was paid
not largely but satisfactorily, and the addition
to the poor-rate was very gradual. Let us not
imagine that the period in question possessed par-
ticular advantages ; that the progress of our cotton
manufacture, and the troubles of France, placed
our countrymen in those days on commanding
ground: they felt the pressure of taxation, and
were not altogether exempt from the pernicious
operation of corn-laws. With confidence, therefore,
may we conclude, that could but a part of our
present burdens be removed, we should follow the
career of productive industry with equal or su-
perior advantage.
* Wealth of Nations, Vol. iii.
CONCLUSION.
have now brought our labour to a close, after
endeavouring to exhibit a picture of our national
situation, and enumerating its various advantages
and drawbacks, in a manner which, whatever may
be thought of the degree of ability, will hardly be
arraigned on the score of partiality. Political al-
lusions have been avoided as much as was at all
practicable, in an inquiry in which statistical results
were frequently affected by the decisions of the
cabinet. If we have ventured on questions of great
difficulty, and occasionally expressed opinions with
a degree of confidence, it has proceeded from no
other feeling than a consciousness of the advantage
arising from command of time, and the opportunity
of giving long continued attention to a few select
subjects.
Summary. — Our first chapter was appropriated
to a much disputed question, the causes of the
unexpected abundance of our financial resources
during the war, and their still more unexpected
deficiency since the peace. This was followed by
an inquiry into the subject of " currency and ex-
" change,*' which, uninviting and intricate as it is,
could not with propriety be omitted in a work
which referred so frequently to changes in the value
of money. The state of agriculture claimed a
Conclusion. 349
longer chapter and more ample details, as well from
sympathy to a very numerous and respectable class,
as from the importance of the subject to the nation
at large. The price of produce influencing so di-
rectly the price of labour, it becomes an object
of great solicitude to arrive at an opinion as little
doubtful as possible in regard to our prospect of
the supply of corn both as to quantity and price.
On that must, in all probability, depend a variety
of future measures : the regulation of wages, sala-
ries, and money incomes, generally ; the degree of
equality in the means of competition between our
manufacturers and those of the continent ; and the
latitude which may consequently be taken by go-
vernment in removing the restrictions on our com-
mercial intercourse.
From these doubtful and anxious points we turned
with satisfaction to the evidence of our increasing
population, accompanied, as it is, by ample means
of subsistence. Augmentation of national power ;
a confirmation of the hope of continued peace ;
the means of reducing taxes — are all, if our views
be correct, consequences of the superior rapidity
of the increase of our numbers.
The examination, in the chapter that followed,
of the fluctuations in the value of gold and silver,
was prompted by a double cause — the revolutions
in the value of money during the last thirty years ;
and the evident disproportion existing at present,
particularly in the metropolis, between the rate of
wages and the cost of the maintenance of the in-
dividual. A hope of being instrumental in cor-
recting these anomalies led to researches of which
the object is to give a permanent and uniform value
to money contracts ; to lessen the prevailing objec-
tion to leases ; to give facilities to a measure likely
350 Conclusion.
to become more and more expedient, — a commut-
ation of tithe ; and, finally, to show annuitants that
it may not be impossible for them to make an
abatement of money income without a sacrifice.
In our concluding chapter we have conveyed
our ideas in regard to the operation of a sinking
fund ; the distinction between temporary and per-
manent depositors in the stocks ; the comparative
weight of English and French taxation ; and the
prospect of a farther reduction of our burthens.
It may appear somewhat singular to our readers
that subjects of such general interest should not
long ere this have been fully discussed ; that ques-
tions of such importance to our welfare should not
have been decisively answered. But in such re-
searches the magnitude of the labour is found to
exceed all previous calculation : the number of
persons fitted for it by situation or habits is not
great ; and, immersed as they generally are in offi-
cial or professional pursuits, a long period elapses
in this, as in the province of general history, be-
fore an individual is enabled to bestow on such
topics the time and attention they require.
Comprehensive as the preceding investigations
may appear, there still remain for discussion seve-
ral subjects of great interest.
Our Trade. — Of our commercial history during
the last thirty years, we propose a sketch as cir-
cumstantial, and as carefully grounded on official
documents, as that which has been given of our
Finances and our Agriculture. The fluctuations
in our trade, the over-rating of our profits during
4
Conclusion. 351
the war, the distinction between real and nominal
additions to property, are all subjects which re-
quire examination, and perspicuous statement.
Emigration. — The present improvement in the
state of our manufacturers has lessened to a very
numerous class the necessity of emigration, but it
still holds in regard to our agriculturists. A dis-
quisition into this subject would open views con-
nected with the diffusion of civilization, not only
in our colonies, but in many districts in Europe,
the state of which is more backward than can easily
be conceived by the untra veiled part of our coun-
trymen. Though to send settlers to these ne-
glected tracts would form no part of our policy,
their improvement would be of interest to us, both
as opening markets for our manufactures, and as
proving to continental powers how much it is their
policy to maintain peace, and to seek in the diffu-
sion of civilization that increase of population and
revenue which they have hitherto so fruitlessly at-
tempted from conquest.
Public Retrenchment. — This question, much as
it has been discussed, still stands in need of an ex-
position unconnected with party views, and found-
ed on considerations strictly statistical, in particu-
lar the power of money in the purchase of commo-
dities, and the extent of the change attendant on
the transition from war to peace.
Finance. — On this head we have communicated
in the present volume only a part of our materials :
much remains to be done to give clearness to
official statements, and to support the arguments
for a farther reduction of our burdens.
352 Conclusion.
Population. — Our view of this subject is dif-
ferent from the creed of most political economists :
we must consequently anticipate opposition, and
if engaged in a renewed discussion, we propose
entering on an exposition of our views in regard
to the much-disputed question of productive and
unproductive labour.
Parallel between England and France. — We
have exhibited a comparison of the charges on
agriculture, and of the general taxation of the two
countries : but there remains much to compare in
regard to the state of trade and manufactures ; of
military and other public establishments ; of educa-
tion, science, and national usages.
These several topics it is our intention to discuss,
in an additional volume, whenever circumstances
shall afford the time requisite for such laborious re-
searches.
APPENDIX
TO
CHAPTER I.
(Page 20.) Expence of the late wars, reckoning from the
beginning o
3 to the beginning of 1816.
MONEY RAISED.
War of 1793.
Years.
By Taxes.
By Loans.
Total.
£
£
£
1793
17,170,400
4,500,000
21,670,400
1794
17,308,811
11,000,000
28,308,811
1795
17,858,454
18,000,000
35,858,454
1796
18,737,760
25,500,000
44,237,760
1797
20,654,650
32,500,000
53,154,650
1798
30,202,915
17,000,000
47,202,915
1799
35,229,968
18,500,000
53,729,968
1800
33,896,464
20,500,000
54,396,464
1801
35,415,096
28,000,000
63,415,096
1802
37,240,213
25,000,000
62,240,213
*263,714,731
200,500,000
464,214,731
Deduct sums for the ser-
vice of Ireland - - 13,000,000 13,000,000
187,500,000 451,214,731
Dr. Hamilton on the National Debt, pp. 157. 269.
[A]
[2]
The late Wars;
[App.
War of 1803.
Years.
By Taxes.
By Loans.
Total.
£
£
£
1803
37,677,063
15,202,931
52,879,994
1804-
45,359,442
20,104,'221
65,463,663
1805
49,659,281
27,931,482
77,590,763
1806
53,304,254
20,486,155
73,790,409
1807
58,390,225
23,889,257
82,279,482
1808
61,538,207
20,476,765
82,014,972
1809
63,405,294
23,304,691
86,709,985
1810
66,681,366
22,428,788
89,110,154
1811
64,763,870
27,416,829
92,180,699
1812
63,169,854
40,251,684
103,421,538
1813
66,925,835
54,026,822
120,952,657
1814
69,684,192
47,159,697
116,843,889
1815
70,403,448
46,087,603
116,491,051
770,962,331
388,766,925
1,159,729,256
Deduct the proportion of the above
raised for the service of Ireland
46,6 1 2, 1 06
1,113,117,150
NOTE. — See a very short but clear summary, entitled " Statement
of the Revenue and Expenditure of Great Britain, in each year, from
1303 to 1814, by C. Stokes."
Summajy. — Instead of Dwelling on these complicated
statements, we invite the reader to fix his attention on the
following abstract in round numbers :
War of 1793.
Total money raised by loans and taxes, ex-
clusive of the loans for the service of
Ireland, about
-^450,000,000
Deduct the probable charge in Great Bri-
tain and Ireland, had peace been pre-
served, 18,000,0007. a-year - 180,000,000
Balance constituting the war expenditure 270,000,000
APR] Amount of our Expenditure. [3]
War of 1803.
Total money raised, exclusive of the sums
for the service of Ireland, about - ^1,1 13,000,000
The deduction for the probable expence
of a peace establishment, may, after
1803, be called 22,000,000/. a-year,
as well on account of our augmented
population, as because in the table of
the war of 1803, the charge of collect-
ing the revenue is not deducted ; say
22,000,000^. for 13 years - 286,000,000
Balance constituting the war expenditure 827,000,000
Average war expenditure from 1793 to
1802, both inclusive - 25,000,000
Average war expenditure from 1803 to
1815, both inclusive 63,500,000
Total charge of the two wars, exclusive
of an ample allowance for a supposed
peace establishment, nearly - 1,100,000,000
This amount, adopted in the text, as representing the
total of our war expenditure, may require some explan-
ation. It is exclusive of the sums raised for the service of
Ireland during the twenty-three years in question, whether
by taxes in that country, or by loans in England ; on the
other hand, it comprizes a large sum appropriated in Eng-
land not to the war, but to the reduction of the national
debt. Still, as the amount of money thus applied did not
materially exceed the sums raised for the service of Ireland,
and as it forms no part of our object to aim at fractional
accuracy, we may safely consider the sums thus left out
as balancing each other, and assume the 1,100,000,000/.
as a representation of our total war expenditure.
Though the expenditure of the war of 1803 exceeded
that of the war of 1793, in the proportion of more than
three to one, the addition made to our public debt was
not at all in that proportion ; the war of 1793 having added
to it fully 200,000,000^,, that of 1803 about 260,000,000/.
In the war of 1803, the far greater part of the expence was
defrayed by the property-tax and other supplies raised
within the year.
Such were the total sums raised for our war expenditure ;
but it is fit to recollect that they do not indicate with any
[A] 2
[4] Comparison of Exports in War and in Peace. [A PP.
accuracy the extent of sacrifice connected with the war.
There remain, as we shall see presently, (pp. xii, xiii.) con-
siderations of great importance on either side of the account ;
such, on the one hand, as the loss arising from the trans-
ition to peace; on the other, the amount of supply derived
from the extra profits attendant on a state of war.
(Page 25.) — Explanation of the " official value of
goods" — The " official value of goods" means a comput-
ation of value formed with reference, not to the prices of
the current year, but to a standard fixed so long ago as
1696, the time when* the office of Inspector-general of the
Imports and Exports was established, and a Custom-house
Ledger opened to record the weight, dimensions, and value
of the merchandize that passed through the hands of the
officers. One uniform rule is followed year after year in
the valuation, some goods being estimated by weight, others
by their dimensions ; the whole without reference to the
market price. This course has the advantage of exhibiting
with strict accuracy any increase or decrease in the quan-
tity of our exports.
Next, as to the value of these exports in the market.
In 1798 there was imposed a duty of 2 per cent, on our
exports, the value of which was taken, not by the official
standard, but by the declaration of the exporting mer-
chants. Such a declaration may be assumed as a repre-
sentation of, or at least an approximation to, the market
price of merchandize ; there being, on the one hand, no
reason to apprehend that merchants would pay a per cent-
age on an amount beyond the market value ; while, on the
other, the liability to seizure afforded a security against
under-valuation.
These two scales of valuation, we mean the official and
the declaration of the exporters, afford the means of solving
a question of no slight importance, viz. the comparative
value of merchandize in the present age and in the preced-
ing century. Some articles, in particular coffee, cottons,
hardware, are cheaper than in the reign of King William ;
but the great majority were, during the late war, so much
dearer, that it was usual to calculate the real or market
value at 50 per cent, above the official value. Since the
peace the case is greatly altered, the market price of goods
having, as we shall perceive presently, been greatly reduced.
* Chalmers' Historical View of the Domestic Economy of Great
Britain and Ireland, 1812.
APP.] Comparison of Exports in War and in Peace. [5]
Total exports from Great Britain, comprising home produce
and manufacture, as well as foreign and colonial goods,
valued at the Custom-house according to the fixed official
standard, (inclusive of export to Ireland).
1814 . . .
1815 . . .
1816 . . .
1817 . . .
. ^56,591,000
60,984,000
. 51,260,000
53,125,000
1818 . .
1819 . .
1820 . .
1821 . .
. . £ 56,85 1,000
. . 4-6,912,000
. . 51,731,000
. . 56,445,000
Annual average of the eight years of peace,
above ^54,200,000
This is the average referred to in the text (p. 25.) with
the addition of our exports in 1821.
We subjoin, in the next place, the declared value of our
exports since the peace.
Exports from Great Britain, taking home produce and manu-
factures at the value declared by the merchants, and adding
in the case of foreign or colonial goods 25 per cent, to the
official value, an addition considerably less than that which
was made in war.
1814
1815
1816
1817
.... ^73,489,000
.... 74,372,000
. . . . 61,138,000
.... 58,032,000
1818 .... ^64,263,000
1819 .... 52,031,000
1820 .... 52,982,000
1821 about 54,000,000
Annual average of the seven years of peace
from 1814 to 1820, both inclusive, men-
tioned in the text, (p. 26.) ^62,330,000
For those who may wish to carry farther these calcula-
tions of our exports, and of their effect on our productive
industry, we add a return of that part of our exports which
is more directly illustrative of the extent of our domestic
industry.
Exports of home produce and manufacture from Great Britain,
exclusive of foreign and colonial merchandize.
In money of
the particular
year.
Supposed to be
equivalent at
the prices of
1792 to
Average
Ditto
of six years ending with 1792
. 1798
.£22,131,000
25 658 000
£22,151,000
23 325 OOO
Ditto
Ditto
. 1804
1810
36,817,000
43,575,000
50,681,000
53,519,000
[A]3
[6] Comparison of Exports in War and in Peace. [Arp.
These sums represent not the official, but the real or
market value ; they are formed by adding 50 per cent, tp
the custom-house standard.
The reduction to money of a uniform value (that of
1792) is expedient for a period in which money has varied
so greatly : it removes a part of the exaggeration to which
we habituated ourselves during the war, and simplifies the
comparison with years of peace, to which we now proceed.
Exports of home produce and manufacture from Great Britain
since the peace, according to the value declared by the ex-
porting merchants, (inclusive of export to Ireland).
Years.
Money of the parti-
cular year.
Supposed to be equiva-
lent at the prices of
1792to
1814.
^47,851,453
3^37,000,000
1815.
53,217,445
42,000,000
1816.
42,955,256
34,000,000
1817.
43,626,253
35,000,000
1818.
48,903,760
39,000,000
1819.
37,940,000
35,000,000
1820.
38,620,000
38,000,000
1821. about
40,000,000
40,000,000
These returns, when compared with the preceding, suf-
ficiently establish the greater value of our exports since
the peace. They may appear at variance with a statement
lately published in a1 work of wide circulation, (Quarterly Re-
view, No. LIL, p. 534.) in which the exports of three years
of war, 1811, 1812, 1813, are contrasted with three years
of peace, 1819, 1820, 1821, and the amount of the former
found to be considerably greater. This, however, is to be
understood of foreign merchandize, and was owing to the
extent of our transit trade during the years when neutrals
had very little direct navigation, and were obliged to carry
almost every article through the medium of this country.
But a transit trade may be very large, without making any
great addition to the productive powers of a country, and
our object being to show the connexion between the
amount of our exports and the degree of activity existing
among our population, our tables are confined to returns
of our home produce and manufactures.
APP.] Connexion between Expenditure and Revenue. [7]
We subjoin a farther extract illustrative of the general
fall in the price of merchandize since 1818.
Exports from Great Britain, of Home Produce and
Manufactures.
Years.
Official value.
The declared or mar-
ket value.
1818.
1819.
1820.
1821 , exclusive of
our export to Ireland
j£44,564,000
35,634,000
40,240,000
40,195,000
^48,904,000
37,940,000
38,620,000
35,826,000
Though the fall of prices followed very closely on the
peace, the market value continued, as appears from the
returns of 1818, from 10 to 12 per cent, above the official
value. In 1819, a year of stagnant trade, the market
value fell to within 7 per cent, of the official value, and
since 1820 it has been below it. By this we are to under-
stand, not that all merchandize is cheaper than in the reign
of King William, when the standard of official value was
formed ; but that cottons and hardware, (in particular cot-
tons) form so very large a proportion of our exports as
to counterbalance the rise in woollens, leather, and other
articles, which are still somewhat dearer than they were a
century ago. — Returns such as these are of the highest in-
terest to the political arithmetician.
(Page 36.) On government expenditure as productive of
revenue. — The reader, after admitting all that is advanced
in the text, may still find difficulty in accounting for the
surprising amount of our revenue during the war. That
the expenditure of borrowed money gives activity to the
present generation, at the expence of the next, is too
obvious to require much illustration ; the intricacy is, in
regard to the portion of the expenditure supplied by taxes,
the circulation of which can hardly be supposed to add to
the wealth of the nation that pays them. Mr. S. Gray,
on whose views, particularly in regard to population, we
shall soon have occasion to enlarge, appears to consider
taxation a means of increasing wealth, and to make no
great distinction between money raised for a military pur-
pose and a rate imposed for the improvement of our streets,
[A] *
[8] Connexion between Expenditure and Revenue. [Apr.
roads, or canals. Without at present discussing this
quesiton, we have no difficulty in regarding taxation, when
expended at home, less as a privation of wealth than as an
instrument of circulation. It is evidently applied to the ex-
tension of employment, and, by increasing the incomes of
individuals, enables them to find a fund for answering its
own demand, — the subsequent visits of the collector.
Imagine the case of a contractor receiving annually
100,000/. from the Treasury, and distributing it in an ad-
dition to the wages, salaries, and profits of two or three
thousand persons. Without the war, these individuals
might, and probably would, have had employment, but not
to an equal extent, receiving perhaps 60/. annually instead
of the 70/. or 801. given them by the war, an addition which
fully enabled them to pay the extra charge imposed in the
shape of taxes. Or suppose the whole expenditure of the
nation, in other words, the amount disbursed on articles,
which, directly or indirectly, pay taxes, to be 200,000,000/.
a year, and that in addition to former burdens, new taxes
are imposed to the extent of 20,000,000/. The effect of
this heavy impost is a correspondent rise in the price of
the articles consumed ; but as the amount received by the
Treasury is forthwith circulated among the payers of the
taxes, and applied to remunerate their exertions, the latter
are enabled to indemnify themselves by an addition to the
charges constituting their respective incomes, whether in
the shape of wages, salary, or profit of stock. Possessed
of this power, the higher price paid for articles of consump-
tion becomes a matter of indifference, particularly when,
in consequence of the government demand for men and
money, the increase of their incomes exceeds the increase
of their expence. The result accordingly is, that they pay
30 or 4-0 per cent, additional on their consumption, add as
much to the charges constituting their incomes, and receive
a farther benefit from the extra business created by the
war. We are thus enabled to account in some measure
for a notion very prevalent on the Continent, but which
every Englishman hears with surprize, — that we prolonged
the war with a view to our pecuniary advantage. Does it
not also serve to explain the popularity of the contest with a
number of our countrymen, in a manner somewhat different
from the generous spirit of sacrifice ascribed to them with
such affectation of sincerity by mercenary journalists ?
Taxation is injurious chiefly in two ways : in an indi-
vidual sense, when the parties assessed have not the means
of indemnifying themselves; and in u national sense, when
APP.] Connexion between Expenditure and Revenue. [9]
the magnitude of the burden is such as to reduce the profits
of labour and capital materially below those of other
countries. The former receives at present a distressing
exemplification in the case of our agriculturists ; the latter
has long prevailed in the Dutch provinces, at least in the
maritime provinces of Holland and Zealand, in which
the charge of defence against the sea is superadded to
heavy demands of a political nature. Such also has been,
in a considerable degree, our own situation since the peace ;
that it was by no means so during the war, has, we trust,
been satisfactorily shown in the text.
We consider, therefore, our taxes during the war in
the light of circulation, without ascribing to them all the
detrimental effects alleged by the majority of political
economists, and still less the beneficial operation attributed
to them by others. The latter opinion, singular as it may
seem, is nearly a century old, and was supported by re-
peated references to the case of Holland before her decline.
In this country it seemed to receive a striking confirmation
from the stagnation that followed the peace, as the public
foiled to take into account how much the circulation not of
taxes but of borrowed money had been the cause of the
general activity during the war.
[10]
APPENDIX
TO
CHAPTER III.
Estimate of National Loss arising from the War.
AFTER the general notice given in the text of the changes
that followed the peace, the progress of inquiry leads natu-
rally to a more specific statement, to an estimate of the
amount of national loss attendant on the war. In this
investigation we shall studiously avoid discussing the policy
or impolicy of that great contest; the practicability of
avoiding it in the outset, or of terminating it in a com-
paratively early stage. We shall avoid, in like manner,
any parallel of a more comprehensive nature; we mean
between the magnitude of our sacrifices on one hand, and
the benefit resulting on the other from restoring the
equilibrium of the Continent. Nothing, indeed, would be
more hopeless than an attempt to produce any thing like
uniformity of opinion on such a subject. The opposi-
tionist, in his review of the events of the last thirty years,
takes little account of the danger that arose after 1795,
from the aggrandizing spirit of the French government ;
nor, while urging, and urging justly, the insignificance to us
of most causes of continental quarrel, does he make due
allowance for the importance of the Netherlands, and the
surprising addition which their possession made to the power
of France. The ministerialist, on the other hand, is equally
confident and indiscriminating, making no admission of
the occasions on which (as in 1793 and 1807) our govern-
ment acted an aggressive part, and justifying the attack on
Copenhagen as he would the defence of Spain. From the
delusion that the war was a source of wealth, we now
begin to be awakened ; but, in other respects, we are yet far
distant from the time when the public shall be enabled to
A PP.] Estimate of National Loss, $c. [11]
view the transactions of this eventful age with the calmness
of historical inquiry. It will be for a succeeding gener-
ation to appreciate, on the one hand, the ferment pro-
duced by the French Revolution ; on the other, the course
by which our political guides, had they been aware of the
little dependence to be placed on foreign allies, and of the
aid to be derived for the maintenance of order from the
structure of society at home, might have endeavoured to
pass the period of alarm. The hazardous alternative of
an appeal to arms would probably have been avoided, had
our councils been guided by a Burleigh ; or had he whom
circumstances placed at our helm in these critical times,
been of an age to derive from personal reflection and ex-
perience that knowledge in which he was necessarily de-
ficient, and the want of which was so feebly supplied by
the coadjutors with whom our system of parliamentary
influence surrounds a miuister.
The discrepancy that prevails among politicians is equally
remarkable among political economists. To the follower
of Smith and Say, all war seems impolitic and unnecessary :
in his eyes, the whole of military array, the training,
equipping, and maintaining of fleets and armies, appears an
absolute sacrifice, the loss of the labour of the most valuable
part of our population. It is with great difficulty that he
can be brought to allow that war brings with it even a
temporary aliment to its consuming powers. On the other
hand, the convert to a doctrine of later date, we mean the
system to which Mr. Gray has given the emphatic name of
" productive," expatiates on the increase of individual in-
come arising from government expenditure ; but carrying
his arguments much further than has been done in our
pages, fails to distinguish between a temporary and a lasting
advantage, and reasons on the stimulus given by the circu-
lation of borrowed money, as if it were exempt from the
frightful reaction which we have felt during the last eight
years.
On the course of our productive industry since 1792, we
extract a passage from a well-known writer : —
" Notwithstanding the immense expenditure of the
English government during the late wars, there can be little
doubt but that the increased production on the part of the
people has more than compensated for it. The national
capital has not merely been unimpaired, it has been greatly
increased ; and the annual revenue of the people, even
after the payment of their taxes, is probably greater at the
present time than at any former period of our historv.
[12] Estimate of National Loss [App.
For the proof of this, we might refer to the increase of
population, — to the extension of agriculture, — to the
increase of shipping and manufactures, — to the building
of docks, — to the opening of numerous canals, as well
as to many other expensive undertakings ; — all denoting
an increase both of capital and of annual production."
(Ricardo on Political Economy, second edition, p. 1 70.)
With this passage, though written in a liberal and en-
lightened spirit, we cannot altogether coincide ; yet our
objections are less to its general tone than to the omission
of some interesting particulars. Thus, no admission is
made of the increased proportion of our burdens to our
incomes ; nor that in any estimate of our national wealth
expressed in money in the present day, a deduction of
nearly 20 per cent, is to be made from an estimate of 1792,
on account of the inferior value of money.
In substance we concur in the opinion of Mr. Ricardo ;
but we have arrived at that result by a minute and, at first,
by no means encouraging investigation, the particulars of
which we shall now lay before our readers.
Losses on a transition from peace to war. — These consist
in the abandonment of various undertakings adapted to a
low rate of interest and a moderate price of labour ; they
may be either agricultural, manufacturing, or commercial,
and their extent will be best comprehended by the re-
collection of the long list of bankruptcies that took place
in 1793.
Losses on a transition from war to peace. — These are
more fresh in the recollection of the public, as well as
more obvious to common observation : soldiers and seamen
discharged, foreign colonies relinquished, the manufac-
tures suited to a state of war suspended, workmen and
capital put out of employment, and the public saddled
with a long list of pensioners and half-pay officers.
Public works, such as canals, roads, and bridges. — These,
however commendable in the intention, are expedient as
undertakings only when the returns are such as to afford
a fair interest for the capital invested. From the high
price of labour and materials in the latter part of the war,
most speculations of the kind, such for example as the new
bridges of the metropolis, were attended with a far greater
charge than if they had been postponed and executed in
peace. The same holds in regard to our agriculture, in
which a large share of the outlay was incurred on the as-
sumption of high prices. Even in the case of our manu-
facturing machinery, a part erected when labour was high,
A PP.] arising from the War. [13]
is no longer necessary or profitable, now that labour is re-
duced. Still, a great part of such loss is merely in appear-
ance, and resolves itself into the different value of money :
the canal share, which, in 1813, cost 100/., may be said
to indemnify its owner, if it at present fetches 70/. ; it in-
volves an absolute loss only, in as far as it falls below that
proportion, a case at present unfortunately too frequent.
Tithe. — This portion of our burdens is different from
general taxation. Its amount, as expressed in money, in-
creased surprizingly during the war, in consequence of two
causes, — the enhancement of produce, and the extended
cultivation attendant on the increase of our numbers. How
far did it prove of detriment to our resources ? It was paid
by that portion of the community, who, so long as the war
lasted, were most able to defray their burdens. On the
public at large, its pressure was not apparent ; in an in-
direct sense, however, that pressure was great, for tithe
operated as an obstacle to cultivation, and greatly restricted
the amount of our produce, at a time when it would have
been most desirable to increase it.
Poor-rate. — In this respect, the estimate of burden
during the late wars is subject to considerable qualification.
The increase of the rate having been as great in agricultural
as in manufacturing districts, although in the former, work
was, all along, abundant, the inference is, that the rise
was, in a great measure, nominal, and would otherwise have
been paid in the shape of wages. When to this we add
the decrease of rates in the last and present year, with the
probability of a progressive diminution, it is evident that
the portion of burden attributable to the war on this
ground, is much less than might be inferred from the nu-
merical statements of the poor-rate.
"We come now to a far more serious charge, the expen-
diture of government, the result of which will be best ex-
pressed in the tabular form.
Computed Amount of Burdens arising from Government
Expenditure during the War.
Interest of the debt contracted during the
war, after allowing for the reduction of
the 5 per cents. - £ 22,000,000
The annual amount of half-pay and pensions
in the army, navy, and civil service, aris-
ing from the war, is at present (1822),
about4-,500,000/. ; but consisting almost all
of life annuities, may be computed equal
to a permanent burden of "2,000,000
[H] Estimate of National Loss [Apr.
Exclusive of this, the expence of our army
and navy is very greatly augmented since
1 792, partly from the extension of our fo-
reign possessions, partly from causes un-
connected with the war, such as the increase
of our population, and the necessity of en-
forcing the collection of the revenue in Ire-
land. At present, after deducting the half-
pay and the recent reduction, the charge of
our army and navy still exceeds that of
1 792 by 6,000,000/., but from the pros-
pect of continued peace, and the general
fall of prices, we may anticipate a farther
eventual reduction of 1,000,000/. Of the
remaining difference, we put to the ac-
count of the war, somewhat more than
half, viz. - - 3,000,000
For increase of the civil list, salaries, pen-
sions in consequence of the war and of
the fall caused by it in the value of mo-
ney - - 2,000,000
Other war charges not enumerated - 1,000,000
Total - ^30,000,000
Deductions from our apparent burdens: taxation of other
countries. — The financial relief which we have in prospect,
is, in some respects, easily understood : thus, that our half-
pay allowances must decrease, either by the occurrence of
deaths, or a transfer for long annuities, is sufficiently ap-
parent ; but the case may not be quite so clear in regard
to a deduction of another kind, we mean that which arises
from a community of the pressure of taxation on the
civilized world at large. However real our losses from
the war, however inferior our national wealth to what it
would have been, had peace been uninterrupted, we
cannot be said to have incurred absolute injury, or to
labour any other permanent disadvantage, in as far as
similar burdens have been imposed on those who are our
competitors in the career of productive industry. This
we say, though perfectly aware of the folly of the doctrine
that one nation gains by impoverishing another, as well
as of the injurious tendency to us of all restrictions on
the industry of our neighbours. Our argument will
be found to rest on a different basis : war, at all times a
losing game, would be doubly so, were our opponents to
escape a participation in the pecuniary pressure; our pro-
APP.] arising from the War. [15]
ductive labourers would soon emigrate, and pursue their
industry in untaxed. countries. To bring our argument to
a point : if in England the late wars have increased the
proportion of burden to income by ten per cent., and if in
France, Germany, or the Netherlands, the comparative in-
crease be five per cent., our loss can hardly be considered
as exceeding the difference; for we suffer in no greater
degree than the extra five per cent, in whatever regards the
hazard of rivalship, the injury from foreign competition.
Our war taxes. — Our next modification of our losses, is
also of a very extensive character, though it does not hap-
pen to form a deduction from the preceding table: it com-
prises no less than the larger portion of the sum raised
by war taxes, which, though (see p. 22. of the text) of very
great amount, we are disposed to consider as defrayed out
of the extra profits of a state of war ; so large was the
gain of the public, whether in the shape of interest, salary,
wages, or profit of stock, increased by the circulation of
the money raised by our loans. In making this great
allowance, we are perfectly aware that in many cases,
particularly after our unfortunate Orders in Council, our
merchants and manufacturers paid their taxes, as our
farmers at present pay their rent, not from income but
from capital. We are aware, also, that the resources which
supplied our war taxes were temporary, and of a nature
to disappear with the stimulus that excited them : but our
estimate is confined to the years of war; and, large as it
is, we are probably justified, on considering all circum-
stances, in making it.
The national debt. — After all these allowances, it may be
incumbent on us to answer the question, whether we " con-
sider our national debt as forming an actual loss, an abso-
lute addition to our public burdens ?" This question, idle
in the view of the attentive inquirer, is by no means super-
fluous in regard to the cursory observer, to those who
imagine our debt a property which without the war would
have had no existence, a responsibility of little importance
because due among ourselves. All such notions we intreat
our readers to dismiss from their minds, and to consider
our debt as not less real for being due to our countrymen.
It is the record of money expended, gone for ever ; and in-
volving, as far as our burdens exceed those of other
countries, a series of permanent disadvantages. Had we
had no war, the capital and labour that has led to the
formation of our debt would not have been unemployed ; it
would have been put in activity by other causes, and re-
ceived its increase in a different form, though the product
[16] Estimate of National Loss [App.
would, doubtless, have been smaller, because the ratio of
increase, whether of interest, profit of stock, or personal
exertion, would in a state of continued peace have been
much less considerable.
The effect of the war on the habits of individuals. — The
increase of wealth arising from the war was much more an
increase of income than of property. The benefit of it was
reaped by those only who had formed their habits in a
season of tranquil occupation, of moderate profit, and who
from their experience and time of life, were ready to reap
the advantage of the new harvest. The case was very dif-
ferent with young men entering on business during the war,
who took for granted that times would continue as they
found them, and made no provision for a reverse. The
characteristics of this generation may be said to have been
a general confidence, a habit of early expence, a repug-
nance to the cautious perseverance of former days. The
extent of evil arising from such a source can be computed by
those only whose observation has embraced a wide range,
who have marked throughout the present age the frequent
substitution of adventure for industry, and the reiterated
loss of capital when entrusted to the young and inex-
perienced.
We shall close this chapter with a brief calculation of
what would probably have been our financial situation,
supposing political science to have been as well understood
at the time of the French revolution as at present, and our
statesmen equally apprized of the close connexion between
the preservation of peace, and the increase of national
prosperity. Had such been the case, we may fairly assume
that our cabinet would either not have interfered in the war
at all, or would have made peace in 1793, as soon as the
French were driven within their frontiers, trusting for
tranquillity at home to measures of police, the aid of an
armed force, and the support of the upper classes of society.
The troubled aspect of the times, and the necessity of
arming the executive branch with power both to repress
sedition, and to effect such measures as the union with
Ireland, and the equal collection of taxes throughout the
kingdom, would doubtless have obliged us to carry our
expenditure considerably beyond that of 1792, perhaps to
increase it in a proportion equal to the increase of our num-
bers and national wealth. What, then, would have been
the result in 1815, the year of the definitive establishment
of peace? If in the twenty-three years between 1792 and
1815, our resources had increased at the rate, not of 30 or
35 per cent., as we shall compute in our chapter on national
APP.] arishigfrom the 7f "ur. f!7]
revenue, but of 2.j per cent, (supposing the increase slcv
in peace), the result would have been our possessing, in
1815, a national income somewhat inferior in amount to
what we actually possessed; but in point of burden, with
the surprising exemption of fully 15,000,000/., ti difference
almost equal to the nett revenue of the Russian or Austrian
empires.
The result, therefore, is, that the late war, so long ac-
counted a source of national wealth, involved a sacrifice of
property not inferior to the sacrifice of lives. To this
double 'drain on our resources, what has been the grand
counterpoise ? — The increase of our population ; a subject,
which, in its place, we shall discuss with all the attention it
merits. At present we shall merely advert to a very common,
but a very erroneous notion, that the rapid increase of our
numbers in the present age is to be attributed to the
war. Whatever may have been the case in regard to the
middle classes, the wages of the lower, particularly those
of the country labourer, bore, even when added to the
poor-rate, (see the chapter on poor-rate), a smaller pro-
portion to the expense of rearing a family than in
peace. Now, as the lower orders form by far the most
numerous portion of the nation, and the circumstances
affecting them are decisive of the general increase of our
numbers, we can by no means join in ascribing the sur-
prizing augmentation in the present age to the excitement
arising from the war, although that opinion may have
(Lord Liverpool's speech, March, 1822) the sanction of
ministerial authority. Our rulers might trace it with much
more confidence to causes of a cheering and permanent
character; to the effect of vaccination, to the improvement
in the lodging, cleanliness, and sobriety of the lower classes.
The extent of national loss attendant on war did not
escape a very intelligent observer, M. Say, who visited
England at a time when we were not ourselves aware of our
approaching embarrassments, and when the rest of Europe
imagined that we were at the zenith of prosperity.
" Ministers and public men in England are as yet, (he
wrote in 18 14-) far from having a just sense of the folly
and ruinous tendency of war : their progress has not kept
pace with the progress of the nation. The misfortunes of
England take their rise in the higher regions, like the hail
and the tempest : her blessings spring from beneath, like
the fruits of an inexhaustible soil. The taxes have not
only doubled, but tripled since 1 792 ; and still the war ex-
penditure greatly exceeds their amount. The consequence
[B]
[18] Estimate of National Lost, $c. [A pp.
is, an enormous enhancement of prices ; mercantile men
are obliged to do business on very slender profits and,
what is still worse, many of the manufactured articles are
sadly fallen from their former reputation. My French
readers," he adds, " will be surprized to find in my pages an
opinion so much at variance with the current notion that
England is the land for the easy and rapid attainment of
fortune; but the reality is widely different from the appear-
ance."
In thus dwelling on the evils of war, our object is not
to join with M. Say, and other decided Oppositionists,
in lamenting what cannot be recalled, or in affixing a
general censure on a course of policy, which, however re-
prehensible in some respects, admitted in many others of
vindication from the conduct of our enemies, or of defence
from the limited foresight of human nature. Our purpose
is strictly statistical, being to impress on the public a
point of great importance to their future welfare, and as yet
but partially understood, viz. that the injury to national
prosperity resulting from war, however it may be palliated
or postponed, is eventually of most serious magnitude, even
when, in a military sense? the issue of the contest has proved
triumphant.
[19]
APPENDIX
TO
CHAPTER IV.
On Currency and Exchanges.
e Amount of Bank of England Notes in Circulation. — •
The circulation of money is generally considered under two
heads; that of the larger sums, which takes place between
wholesale dealers ; and that of the smaller, which applies
to retail, the payment of wages, and other petty transactions.
Between wholesale dealers money circulates with rapidity :
bank notes, like coin, being wholly unproductive, any
superfluous stock of them is exchanged as quickly as possi-
ble for mercantile acceptances, the purchase of government
stock, or other securities readily convertible into cash. In
London, the vicinity of bankers to each other, and the
power of receiving an immediate supply on a deposit of
securities, enable banking-houses (Bullion Report, p. 26.
and Evidence, p. 123.) to lessen greatly the amount kept by
them as a reserve or unproductive fund. Add to this, that
whatever renders money abundant in the metropolis has a
speedy effect on the kingdom at large ; so intimate is the
connexion between town and country, so extensive the cor-
respondence (Evidence, Bullion Report, pp.123, 124, 125.)
of bill and money agents. If we assume six weeks as the
medium term of bills discounted at the Bank, and suppose
the money to change hands once in two days, the result
is that 100,000/. thus obtained will, in the course of
the six weeks that the bill remains uncalled for, circulate
about 2,000,000£. of merchandize. How great, then, must
have been the distress of trade in the latter months of
[B] 2
|~20] Our Currency and Exchanges. [App.
1796, and the early part of 1797, when our circulating
medium was contracted by two or three millions : how
seasonable the relief afforded in the course of 1 797, by the
resumption of discounts on their former scale !
After such a statement, it may be a matter of no little diffi-
culty to convince our readers that the increase of Bank of
England notes affords no satisfactory proof of an increase
of our circulating medium at large* We must, however,
remind them of a point in which the public opinion was
long equally positive, viz. that we received an annual sum
of money from foreign countries, in payment of our profits
or balance of trade. This was a favourite notion with our
ancestors, and is still a prevalent impression among our
practical men. The balance was even reduced to specific
computation, the received mode of calculating it having
been to deduct the amount of our imports from that of our
exports, and assume that the difference must be profit, pay-
able to us in hard cash : a comfortable doctrine certainly,
and one which, had it been wrell founded, would have
brought among us, in the course of the last century, a sum
little short of 400,000,0007. sterling. This is mentioned
merely as an example of the hazard of deducing an infer-
ence from appearances : in regard to the present question,
the increase of Bank of England paper, the doubt arises
from our having no power to discriminate how far such
increase forms an addition to our circulation, or is merely a
a substitution of paper for coin sent abroad. Or, if the
state of exchange be considered as affording, in some
measure, an index in that respect, what means have we of
ascertaining another material point ; viz. how far an extra
issue of Bank of England notes may not be a substitution
for a coresponding amount of country bank paper withdrawn
from circulation? This was, doubtless, the casein 1810
and 1811, a time when a number of country banks became
either insolvent or discredited by the insolvency of their
neighbours. Again, on the fall of prices in 1815 and 1816,
there took place in our paper currency a reduction of several
millions; but as the Bank of England experienced no
variation of consequence, the inference is, that its paper
must have been substituted in various districts for the
diminished circulation of the country banks. Finally, we
have the authority of both the Bullion Report, (p. 26.) and
of that of the Bank Committee of 1819, that no satisfactory
conclusions are to be drawn from the amount of Bank of
England paper in circulation ; a declaration of great im-
portance, since the increase of that circulation formed all
Apr.] Our ('iinrnn/ and K.ichangfs. [21]
along, to the antagonists of tlu- Hank, the fundamental
argument ibr the charge of over issue.
Fluctuations in the Circulation oj Rank of England Notes.
Were we to attempt calculation on a subject necessarily
conjectural, we mean how far additions to the circulation
of the Bank of England formed an increase of our currency,
or were merely a substitution for coin sent abroad, we
should begin by considering in the latter sense all notes of
}L and 2/., and confine our attention to the fluctuations in
notes of 5/. and upwards. The addition made to the latter,
in the years 1797 and 1798, appears to have done little
more than replace the contraction caused by the general
embarrassment and distrust of the early years of the war.
In 1799, J800, and 1801, there took place an increase of
nearly two millions, proceeding from several causes, par-
ticularly the export of coin, and the general rise in the
price of commodities. From the end of 1802 to that of
1808 there was hardly any increase; a circumstance in a
high degree remarkable, when we consider the extension
of our productive industry, the farther rise of prices, and
the continued exemption of the Bank from cash payments.
From 1809 to 1814- the case was altogether different, the
circulation increasing four, five, six, and even seven mil-
lions above its amount in the preceding period. Of this
the causes were various ; first, the almost complete export
of our metallic currency; next, the discredit of country
banks after the insolvencies of 1810 ; but, above all, the
rise of prices which, at this period of the war, was owing
chiefly to the depreciation of our bank paper.
The next era of fluctuation (1815 and 1816) was of a
very different character : it affected chiefly the country
banks, and was evidently a consequence of the general fall
of prices, multiplied failures, and stagnation of business.
The amount of this contraction has not been ascertained
with any accuracy ; but from the returns inserted towards
the close of the Report of the Bank Committee of 1819,
it seems to have exceeded 8,000,000/. ; a sum which, large
as it was, appears to have been nearly counterpoised by the
re-extension of country-bank circulation on the rise of prices
in 1817 and 1818.
Since the peace, what have been the causes affecting the
circulation of the Bank of England ? The substitution, on
a greater or less scale, of coin for paper ; the rise or fall of
[B] 3
[22] Our Currency and Exchanges. [A PP.
prices ; and, what is closely connected with that rise or
fall, the credit or discredit of our provincial banks.
Circulation of Provincial Banks. — To ascertain the
amount of country-bank paper in circulation, would be an
object of great interest and importance ; at present our
means of calculating it are very inadequate, and must con-
tinue so while private banks are so numerous and on so
small a scale. The Bank of England, placed above the
hazard of discredit, declares openly its circulation : private
bankers require, or conceive that they require, the aid of
secrecy. This will, in all probability, continue until the
arrival of the much-desired period, when the country at
large shall be admitted to the advantage at present enjoyed
by Scotland alone, we mean that of having an unlimited
number of partners in country banks. The consequence
would be, a stability beyond all doubt ; and the accumula-
tion in a limited number of great establishments (chartered
banks) of that business which is at present broken into
small and frequently insecure fragments. (See the Evidence
of E. Gilchrist before the Bullion Committee: 1810.)
The Exemption from Cash Payments. — To exempt banks
from cash payments was a measure altogether new in the
history of finance, and the necessity for it is to be sought
in difficulties that were peculiar to ourselves. France,
Austria, and most other countries know no mode of carry-
ing on war but by furnishing men and military stores ; but
after 1795, England, in a great measure, exchanged this
plan for the payment of subsidies. Then as to an occasional
demand for a very different purpose, the supply of corn,
the lower classes in most countries of the Continent, on the
occurrence of scarcity, have recourse to coarse substitutes,
or, being immersed in a poverty of which we have no
idea, often fall victims to unhealthy food, sometimes to ab-
solute want ; while, in a wealthy community like England,
an export of the circulating medium is made the means of
obtaining relief. Now, though the sums sent abroad are
in either case less great than they appear, our subsidies
being furnished, in a great degree, in stores, and our corn
paid, in some measure, by manufactures, the drain takes
place from a stream already sufficiently small for its channel ;
for in no country is there more of circulating medium than
is indispensable for the transaction of business. This is ap-
parent from various circumstances; from the rapidity with
which money is made to circulate from dealer to dealer;
20
APP.] Our Currency and Exchanges. [25]
also, from a recent and striking fact, the distress that oc-
curred in France in the autumn of 1818, when, notwith-
standing the enjoyment of peace and free trade, the abstrac-
tion of a part of the metallic currency led to the most
distressing results : an immediate reduction of discounts, a
general fall of prices, arid along list of bankruptcies.
From difficulties of this nature we were relieved by that
decisive measure, the exemption of our banks from cash pay-
ments: after its adoption no scarcity of money was expe-
rienced in the years of our heaviest continental demands : its
effect, in fact, was to remove present pressure by incurring
the hazard of depreciation, and of a great ultimate addition
to our debt.
The time of its operation. — A considerable time elapsed
before the operation of the act was fairly tried. In 1797
and 1 798, our financial affairs were prosperous ; our con-
tinental exchanges were favourable ; and the suspension of
subsidies and corn imports would, without the exemption,
have restored confidence in our money market: when,
concurrent with it and with a vigorous increase of tax-
ation, they raised the funds and added largely to the
command of money on the part of our merchants, our
manufacturers, our agriculturists. It was not till the
autumn of 1 799, that the aid expected from the act was
put fairly to the test : our allies required large payments ;
our deficient harvest necessitated a great import ; and both
were supplied without the pecuniary embarrassment expe-
rienced before the exemption. The means now adopted
were, the export of our coin to the Continent, and the sub-
stitution of bank paper : the result a partial depreciation
(between 3 and 5 per cent.) of bank notes relatively to coin.
In 1800, notwithstanding the continuance of continental
demands both for subsidies and the purchase of corn,
both government and the mercantile world still escaped
pressure from scarcity of money, and thus got over an
interval of greater pressure than any in the early years of
the war. The experiment had not, indeed, been made
with impunity : we had exhausted our coin, and could not
have undergone such another trial without a great depre-
ciation of our paper. This was, doubtless, felt by Mr. Pitt,
and may be ranked among his principal motives for
resigning and advising peace; but the shock was not
perceived by the public, and was evidently of a nature to
be repaired in a season of tranquillity.
Effect of the Exemption Act on the Prices of Commodities. —
The export of our coin and the substitution of bank paper,
[B] 1
[24-] Our Currency and Exchanges. £App.
added a considerable sum to the currency of the civilized
world, (above 10,000,000/. sterling between 1799 and 1802)
and must have operated in a corresponding degree to die
rise of prices : but this rise being common to other coun-
tries, had no tendency to produce a change in England.
This part of the question is easily understood, but there is
no small perplexity as to another point ; we mean the power
conferred by the exemption act on our bankers to discount
at a lower rate of interest than was practicable in other
countries. The effect of this highly important power will
be found, on examination, to tend as much to lower, as to
raise prices. The reasons are, that the advances of our
bankers were made at a lower rate of interest ; next, that
they were made to classes strictly productive, and were evi-
dently instrumental in increasing the quantity of our produce
and manufactures ; in other words, they tended either to
lower prices or to supply a better commodity for the same
price. In manufactures this effect is traced with difficulty ;
but in regard to agriculture there is no break in the chain
of evidence, — no doubt, since the rise of price was owing
to the insufficiency of our growth, that whatever contributed
to extend that growth conduced to lessen the progress of
enhancement. It is true, on the other hand, that the in-
creased command of capital led to a rise of wages and
salaries; but on the whole, we are probably justified in
concluding that, after making allowances on both sides of
the question, the effect of the exemption act was as con-
ducive to lowering as to raising prices until 1809, when all
fell into disorder, and the depreciation of our currency abroad
became so great as to affect materially its value at home.
How far is a doctrine so contrary to the opinion of
the bull ion ists supported by a reference to facts ; to the
leading events in the history of our productive industry
during the war ? To refer again to agriculturists, the
class most nearly connected with banks of circulation : —
our growth of corn, inadequate during the whole war,
became so, in a high degree, soon after the exemption act;
our fanners had then a powerful motive to extend their
tillage, and, in fact, did extend it as far as their means ad-
mitted. It was a general notion on the part of the public,
and we believe of ministers, that this extension was limited
not by want of funds, but by the nature of the soil ; an
opinion, however, -clioily di&jtrored by the experience of the
last seven years, in which, without equal motives to ex-
tension of tillage, the amount produced from our soil has
been so greatly augmented. On this highly important fact
Apr.] Our Currency and Rirlian
we have enlarged in our chapter on Agriculture. At
present we shall merely ask, to what has the augmentation
been owing, except to the application of additional capital
and labour ? Observe the importance of the conclusion
to which this leads : our soil having been, as far as re-
garded natural fertility, as capable of increased production
ten years ago as at present, had our banks possessed the
power ascribed to them by the bullionists, would not their
issues have been increased, and would not our agriculturists
have obtained from them such supplies of capital as would
have enabled them to extend their tillage, and bring our
growth of corn on a level with our consumption? If want
of hands be alleged as the obstacle, our answer is, that
in Ireland and in Germany there were many thousand
labourers unemployed, and that a command of capital,
such as is vulgarly ascribed to our banks of circulation,
would soon have transported them to our shores.
Increase of Discounts explained. — The Bullion Committee
in their Report (p. 26.), animadverted emphatically on the
great increase that had taken place in the amount of dis-
counts by the Bank of England, between 1797 and 1810.
This they ascribed to over issue, but they omitted to make
allowance for the operation of several causes of a wholly dif-
ferent nature. Thus, after the Exemption Act, the notes of
the Bank of England were made to replace the cash reserve
of every banker in the kingdom, and supplies of these
notes could be obtained only by discount. Hence, the
adoption of a practice, which, in the last age, would have
been deemed not a little extraordinaryby the cautious vete-
rans of Lombard Street, — that of London bankers opening,
like merchants, accounts with the Bank of England ; and,
when in want of money, sending thither bills for discount,
in preference to a sale of Exchequer bills or stock. If the
reserve fund of all the country banks of the kingdom, pre-
vious to the Exemption Act, be calculated at 4-,000,000/.,
we need be at no loss to account for a very large addition
to the demands for discount on the Bank of England.
The Rate of Interest. — Our last reference to facts, or, as
the French express it, to les choses positives, regards the rate
of interest which, notwithstanding the magnitude of our
war expense, rose only one per cent, above its average rate
in peace. This was certainly a very moderate difference,
and owing, in a great measure, to the substitution of war
taxes for loans ; to our raising so large a portion of our
fciipplies within the year. It was, owing also, in a very
[26] Our Currency and Exchanges* [Apr.
considerable degree, to the advantage arising to bankers,
from the Exemption Act ; an advantage founded, in the case
of provincial banks, on the saving of their reserve or dead
fund, and wholly distinct from a power to increase their
issues ad libitum. Had the latter been practicable, would
not so gainful a business have been followed more ex-
tensively, and would not interest soon have been reduced,
by an eager competition, from five to four per cent.?
Was the Exemption act at all similar in its effects to an in-
creased produce of the precious metals ? — The ease with
which bank notes are struck off, and the apparent ease
with which they are circulated, impressed the public, long
before the late wars, with a notion, that banking operated
like mining ; and the general rise of prices that took place
after 1764-, was, by many, ascribed to that cause. For-
tunately, Dr. Smith was then alive to combat prejudice
in the people, or error in their rulers : he undeceived the
public in this important point, and showed (Wealth of Na-
tions, Book II. Chap. II.) that bank notes formed not an
addition to the circulating medium of a country, but a
substitution for coin sent abroad. In strict accuracy,
he ought, perhaps, to have added, that the money sent
abroad had some influence on prices in other countries, in-
asmuch as it formed an addition to the currency of the
world at large : but in his age, the progress of banking
was very gradual, and the portion of coin exported from
England did not, perhaps, amount to a million sterling in
five years ; while in our time the export of only three years
(1799, 1800, 1801), appears to have exceeded ten mil-
lions.
That the issue of bank paper adds but slightly to the
stock of currency, so long as such paper is demandable in
cash, will be readily admitted ; but when exemption pre-
vails, the case will, by many, be accounted very different.
The rise of our prices during the war was so progressive,
and so coincident in point of time with the increase of bank
paper, that the affirmative of the proposition was generally
believed, long before it received a kind of official sanction
from the Bullion Report. To ascribe enhancement to
over issue, was easy ; to trace it to other causes and to de-
fine the limited operation of the non-convertibility of otir
paper, would have been a tedious and intricate task. There
is, however, little difficulty in perceiving a radical distinc-
tion between a supply of currency from a mine, and a sup-
ply from a bank, even when exempt from cash payments :
the former tends to lower the value of money directly, by
APP.] Our Currency and Exchanges. [27]
ing forward gold and silver, commodities of un-
doubted acceptance and universal circulation ; while a bank
produces only a substitute, an article wholly worthless, ex-
cept in a representative sense. It must, therefore, await
the call of the customer, and its circulation can be aug-
mented only to meet a rise proceeding from other causes.
Farther, this extended circulation can continue only so
long as the causes of high prices remain in force ; for bank
paper is strictly passive, having neither the power of rais-
ing prices in the first instance, or of maintaining them
when raised.
This doctrine may appear somewhat bold ; but we ap-
peal to the evidence of facts, and invite our readers to in-
quire whether our view of the question is clearly established
by the course of circumstances since the peace. During
1815 and 1816 no compulsion was exercised in regard
to a return to cash payments, nor were the advantages
arising to bankers from the Exemption Act, restricted in a
single instance ; yet country bankers were forced greatly to
curtail their paper in circulation, a measure which, had
they possessed the power commonly attributed to them,
would, doubtless, have been postponed till the act had
been repealed. This repeal has come at last, and how
little it was wanted we have endeavoured to make apparent
in the text.*
Our arguments will probably be more successful, when we
proceed to consider the Exemption Act in another light ; in
that of an economising expedient. The use of bank paper
is a refinement enabling a community to turn to account a
large proportion, suppose the half^ of a currency which
would otherwise be wholly unproductive. The exemption
from cash payments is a farther refinement, enabling
bankers to hold, at the disposal of their customers, the
chief part of their reserve fund; which, for the sake of pre-
cision, we shall consider a fourth of the paper currency in
the country. Now, to keep the reserve fund as low as is
compatible with security, has long been the wish of our
bankers, and the object of a variety of arrangements ; of
these, the most remarkable is that by which they settle
their daily balances against each other, amounting (Evi-
dence to the Bullion Report, p. 151.) to the very large
sum of 5,000,0007. daily, by an exchange of cheques,
*For farther arguments on the limited power of banks, see a
pamphlet entitled " Observations on the Depreciation of Money ;"
also a second pamphlet, entitled " Farther Observations ;" both pub-
lished in 1811, by Robert Wilson, Esq. Accountant, and one of the
Directors of the Bank of Scotland.
[28] Our Currency and Exchanges. [App.
without having occasion to use more than a tenth of the
sum in bank notes. Of the same nature, are certain facili-
ties given at the Bank of England, in regard to the hour at
which a banking house makes its payment for the day; as
well as the employment of money agents or middle-men
(Evidence, Bullion Report, p. 124-.) in obtaining sums from
one banker for another, at very short notice. These
various modes of lessening the amount of a dead stock are
both ingenious and legitimate, affording a striking proof of
the advantages attendant on a great commercial community,
on mutual confidence, and vicinity of position. A farther
saving of this nature would have formed one of the leading
features of Mr. Ricardo's " plan for an economical and se-
cure currency." Now, the result, which, on a comparative
small scale, was attained by these arrangements, was ac-
complished, en grand, by the Exemption Act ; which, by
one decisive provision, enabled bankers to dispense with
the most expensive and anxious part of their business. So
far as regarded circulation at home, its effect partook of
the beneficial character of the economising expedients ; its
weak side was towards the Continent, and there accordingly
was received the wound which proved the source of so
much pain and disquietude after 1809.
Report of the Bullion Committee. — This document, the
merits of which have been so differently estimated, maybe
read with interest even at present, when the subject has
received so much additional elucidation, both from research
and from events that have intervened. That its authors
had deferred for a season the formation of their conclu-
sions on a subject so new and complex, had certainly been
desirable; but there seems no ground for the suspicions of
their being actuated by party feeling: their labours give
evidence of great research and solicitude for truth ; while
the imperfections in their reasoning admit of explanation
from circumstances similar to those to which we have al-
luded in the text ; in particular, the fact, that so much of the
information now before the public was either unknown or
very imperfectly disclosed to them. Thus, a witness of
evident ability, and in the habit of very extensive discount
transactions, gave (p. 124.) the following evidence:
" Do you know, in point of fact, whether such transac-
tions as you have now described, were in practice previous
to the suspension of the cash payments of the Bank ? —
Yes ; they were.
" Do you know whether they were practised to a similar
extent ? — No ; they were not.
APP.] Our Currency and Uxclian [29 J
" In what proportion, compared with the present time ? —
I cannot form any exact criterion.
" Can you state to the Committee, the cause of such dif-
ference?— I believe it to be on account of the increase of
country paper, and also Bank of England paper.
" Can you form any idea what would be the consequence
of reducing the amount of the circulating paper in the
country, by refusing to discount so largely as at present ? —
A more steady and regular price of all commodities, with
more confidence in all money transactions."
When a witness of such intelligence, in accounting for the
augmentation of bill business, leaves out of consideration the
effects of the increase of our population and productive
industry from 1797 to 1810, we need hardly wonder that
it should have escaped the attention of the Committee.
The passages in the Report which treat of the principles
of money and exchange, whatever, in short, can be termed
an exposition of general principles, are equally remarkable
for accuracy and clearness ; those of a different character
are to be found in the latter part (pp.23, 24-.), and are open
to censure, chiefly as implying a belief that the Bank had
the means of increasing its issues at discretion, as if the pub-
lic were wholly without the power of checking the circu-
lation, a power so clearly illustrated by Mr. Bosanquet,
in his " Practical Observations on the Report." Another
serious error, or rather omission in the Report, is an in-
attention to the effect on the exchange of our subsidies and
corn purchases. An admission is, indeed, made (p. 16.)
in general terms, of the effect of political and mercantile
transactions ; but the impression conveyed by it is lessened
by other passages (p. 21, &c.) in which the effects in ques^
tion are treated as slight, and the result of the stoppage
of American intercourse with the Continent is wholly passed
over.
Of the extent of misconception conveyed by disseminat-
ing the opinion (Report, p. 23.) that the rise of prices was
owing chiefly to our bank paper, some idea may be formed
from one simple fact. The total rise of prices between 1797
and 1810 was not short of 30 per cent. ; and of that, perhaps,
not more than 5 or 6 per cent, was at that time attributable
to the non-convertibility of our paper, so lately had the
continental depreciation (Essay on Money in Napier's Sup-
plement, p. 526.) begun to be felt at home. In this, we
have the authority of an eminent bullionist, against the
Bullion Committee itself. Still, the errors of the latter
may be easily accounted for. The chief writer of the
Report, however temperate, impartial, and likely to rise
[30j Our Currency and Exchanges. [Apr.
in reputation, had his life been prolonged, was a stranger
to the practice of business ; and could not, from his youth,
have had much acquaintance with the state of our money
transactions previous to 1797. Of his coadjutors, one
was a banker, never remarkable for clearness or accuracy ;
another, a man of undoubted ability, but at that time new,
as he has himself admitted *, to questions of this nature.
Accordingly, in historical and commercial matter the
Report is very defective ; no notice is taken in it of
the pecuniary embarrassments of 1795 and 1796, arising
from the double drain of specie for subsidies and corn ; nor
is the recurrence of these causes in 1799 or 1809 adverted
to, although it was to them that we owed the chief increase
of our bank notes. Nothing would have contributed so
much to obtain the conviction of the mercantile body, we
may say of the public at large, as a course of reasoning sup-
ported by facts. Such an inquiry, conducted with the can-
dour that marks the Report, and was so conspicuous in the
general parliamentary conduct of Mr. Homer, would have
led to several very important conclusions ; — to an estimate
of the share in depreciation to be ascribed in the first place
to the expenditure then making in Spain ; next, to the corn
imports then in progress from the Continent ; and lastly,
to the interruption of the trade of the United States. Had
the effect of the last been proved to be considerable, the
inquiry might perhaps have led to a most desirable measure
— the repeal of our Orders in Council before the United
States resorted to the alternative of war.
Questions at issue between the Opponents and Supporters of
the Bullion Report. — The points most strongly contested
between the opposite parties in the bullion question were
two ; — first, the cause of the fall of our exchanges ; and
next, the cause of the progressive enhancement of commo-
dities. As to the former, the events of 1815 showed, be-
yond doubt, that the primary cause of fluctuations in the
exchange was to be sought in continental transactions, how-
ever much the non-convertibility of our paper might affect
the degree and duration of the fall. The second question
is more complicated, and there is still no small difficulty in
convincing the bullionists that the operation of our non-
convertible paper was passive, and necessarily posterior to
the rise of prices. They will not, however, refuse their
attention to facts, or deny that a very general rise of prices
took place prior to 1797; nor will they refuse to admit in-
ferences from the case of the agriculturists, the class whose
* Huskisson on the Depreciation of our Currency, J810.
A pp.] Our Currency and Exchanges* £31]
circumstances operate most directly on the circulation of
country banks. Observe the connexion between the pros-
perity of the one, and the circulation of the other. The
continued inadequacy of our growth of corn rendered the
war a period of activity in regard to inclosures, drainages,
and other agricultural improvements : prices were carried to
30, 50, and in the latter years of the war to 100 per cent, be-
yond those of peace, requiring thus twice the sum to pur-
chase the same commodities. Wages rose progressively ;
the style of living of the farmers, and even of their labourers,
was visibly improved. Observe the reverse of the picture as
exhibited in 1815 and 1816 : prices and wages had fallen
surprisingly; inclosures, drainages, and other improve-
ments, were discouraged ; the style of house-keeping on the
part of the farmers was lowered, and a far smaller sum of
currency was found sufficient for their transactions. In
1817 the high prices of corn brought back activity in agri-
cultural improvements, and (see the Report of the Bank
Committee of 1819) a renewed increase of paper currency.
During the last three years the picture has been for the
fourth time reversed ; prices have fallen greatly, and with
them the circulation of bank paper.
It would, we may with confidence add, be no difficult
matter to apply the same reasoning to the prices of
merchandize generally ; all, or almost all, continued on the
rise, so long as the war limited the number of our produc-
tive labourers; while all experienced a fall at the peace
before the reduction of bank paper.
We thus consider our banks as following the course of
circumstances, and as taking no lead, either in extending
or contracting their issues. Those who think otherwise,
and who regard our banks as both possessing and exercis-
ing the power of over-issue, are pledged to show how it
happened that these potent associations did not thus act at
much earlier period. Why did our banks defer, until 1809,
that which they might have done in 1797, at all events in
1803? On referring to the Bullion Report we shall find
(p. 25.) that this difficulty is noticed, but not explained ;
and that the Committee, in pointing out two periods of ex-
tended issue, at the distance of more than seven years from
each other (1801 and 1809), were wholly unable to give
reasons for the circulation remaining stationary during that
long interval. Farther, if our banks possessed this lu-
crative power, why suspend its exercise at the peace of
1814, so long before the act for the resumption of cash
payments ?
[32] Our Currency and Exchanges. [A PI*.
Inefficacy of an Exemption from Cash Payments in Peace.
— We proceed to address a lew sentences in the same style
to a very different class of persons ; to those who, suffering
under the depressed price of merchandize or agricultural
produce, regret that the exemption from cash payments
should not have been made a permanent part of our policy.
These persons cannot be aware that in peace this exemp-
tion would be of very rare and limited operation : it was in
existence during 1819 and 1820, yet our prices continued
progressively falling ; in other words, the value of money
progressively rose. The exemption from cash payments
was, then, in one point of view, unnecessary ; in another, it
was inoperative. That it was unnecessary, was shown by the
ease with which discounts were obtained ; that it was inoper-
ative, appeared from our exchanges keeping at or above
par. Yet so little is this understood, that in the debates on
the subject in the House of Common (e.g. 9th April, 1821),
the majority of our parliamentary guides attribute the
great fall in prices to the return to a metallic standard ;
as if a state of peace and a favourable harvest were of little
account, and the power of keeping up prices were actually
vested in our banks.
Is it not apparent that in peace, when our exchanges
are brought down by only one great cause, an occa-
sional necessity for importing corn, the exemption from
cash payments would be available only in a year like 1817,
when the deficiency of the preceding crop led to a sudden
demand on our neighbours, and when the exemption from
cash payments would enable us to send abroad several mil-
lions of our metallic currency ?
Mr. Peel's Bill. — The majority of the public yielding to
first impressions, and unable to follow up an intricate course
of reasoning, have ascribed to Mr. Peel's bill that re-action
which arose from a more comprehensive cause ; the transi-
tion from war to peace. As to the present effects of that bill,
we can trace none of consequence, except the partial rise in
the value of gold throughout Europe generally consequent
on the large purchases of the Bank of England ; while, as
to its permanent effects, we can trace, so long as peace lasts,
hardly any worth notice, except an obligation on that
establishment to keep a large reserve in cash, and conse-
quently to reduce its annual profits by 400,000/. or what-
ever may be the charge of providing and keeping that
deposit. Country bankers, on the other hand, are sub-
jected to little additional expense, continuing, by the act of
1819, now about to be prolonged, exempt from the neces-
sity of paying in cash, if they tender Bank of England notes.
APP.] Our Cwrency and Exchanges. [33]
Those who ascribe our present embarrassments to
Mr. Peel's Bill, and the resumption of cash-payments,
would do well to consider that no legislative arrangementhas
the power of converting a banker into a capitalist. The
object of the latter is to obtain interest for his money, with-
out the trouble or hazard of active business ; while a banker
is necessarily a man of business, and seldom a man of
large capital. His funds, arising chiefly from deposit, and
being subject to sudden demands, must be vested in se-
curities easily vendible, such as mercantile acceptances,
exchequer bills, or government stock. Any deviation from
this course, any advance of money made on land, houses,
or property of doubtful sale, is at variance with the rules
of his business, and never fails to be attended with em-
barrassment or loss.
Publications on Exchange / Correspondence of their Doc»
trines with the preceding. — The present age has been fertile
in essays on the principles of exchange, among which, the
most entitled to attention are ; a series of remarks in the
Bullion Report, (pp.10, 11.); Mr. W. Blake's pamphlet
entitled, " Observations on Exchange," published in 1810 ;
and an essay by Mr. J. R. M'Culloch, under the head of
" Exchange," in the Supplement to the Encyclopaedia
Britannica. The last claims our attention, not only as
an able and comprehensive treatise, but as differing in its
general tone from the arguments advanced in the text ; a
difference, however, which, on an attentive examination,
will be found less considerable than it appears. Thus,
Mr. M'Culloch, in maintaining (p. 220.) that corn-pur-
chases or expenditure abroad have no permanent effect on
the exchange, does not deny that their temporary effect is
great. Such is also our doctrine, as exemplified in the ta-
bular statement in the text : the fall in our exchange was not
permanent at all till 1800, nor permanent, in a high degree,
till 1809 ; and in both cases, it became, after a certain time,
nominal. Again, a fall in the computed exchange, when
there is no exemption from cash payments, is recovered
during the continuance of the pressure, but when such
exemption subsists, the currency loses its reinstating power,
and becoming depreciated, the exchange continues de-
pressed until the re-action of causes, mercantile or political,
restore the value of the currency. Of both we have had
striking examples in the present age : the fall of our
exchange in 1795 and 1796, was redressed in the end of
1796, and beginning of 1797, before the termination of
EC]
[34] Our Currency and Exchanges. [App.
our subsidy to Austria, whereas the fall in 1800, and still
more that in 1809, continued, until the conclusion of peace
entirely altered the nature of our connexion with the
Continent.
We have dwelt in the text on the fluctuations of the
exchange in 181.5, viz,, on its sudden fall on the renewal of
continental hostilities, and its no less sudden rise on the
prospect of their termination. Both are evidently ac-
cordant with the general admission in the Essay in question
(p. 220.), of the great temporary effects of foreign demand.
They require, therefore, no farther notice, except as to the
extent of the fall in April and May, 1815, which (nearly
20 per cent.) was very great, open as the Continent then
*ras to our exports.
But does not this extent of fall furnish a strong presump-
tion in favour of another part of our reasoning on this in-
tricate subject, viz., our mode of accounting for the great
and continued depression of the exchange during the years
1811, 1812, and 1813? The demands on us from the
Continent, say the bullionists, were not great in these years ;
but admitting the correctness of Mr.M'Culloch's statement
(Essay on Exchange, p. 222.), that our remittances to the
Continent for corn and subsidies did not much exceed
2,()00,000/. sterling in each of these years, we consider
even that sum sufficient to continue the depression, England
being then wholly exhausted of the precious metals, the
counterpoising effect of the American trade removed, and
our exports to the Continent greatly cramped.
In regard to another point, the diminution of country
bank paper, which took place in 1815 and 1816, we agree
with Mr. M'Culloch as to the fact, and are not disposed
to dissent from his estimate of the extent of the reduction :
the difference lies in our considering this reduction as
posterior to a fall of prices, exactly as we consider the
augmented issue during the war, and in 1817 as posterior
to their rise.
Lastly, as to the extent of depreciation arising from
the exemption act. That the unfavourable balance of
exchange from 1809 to 1814- was chiefly nominal, and
that in regard to continental payments our bank paper was
depreciated to the extent denoted by the course of exchange,
we readily admit. But as the use of our bank paper was
to circulate commodities at home, and as the rise of prices
consequent on its continental depreciation was by no means
immediate, we have, we conceive, made a fair allowance
in taking the average of home depreciation at somewhat
AFP.] Our Currency and Exchanges. [35]
more than the half of the foreign ; meaning, that if in
Spain or Germany 125Z. in notes were required in 1812,
to pay for that which might have been purchased for 100/.
in metallic currency, the proportion at home was probably
1 0 per cent, less ; 1 1 5/. in notes purchasing what, without
the exemption from cash payments, might have been had
for 100/.
Changes in the Value of Money. — Our readers will now
be able to form a definite idea of what is meant by a fall or
rise in the value of money, an expression by no means ac-
ceptable to anti-bullionists, but which can hardly be avoided
by an impartial narrator of the fluctuations of the age.
The fall of prices since the peace has been very different
in different articles ; for while in the produce of the soil it
is above 70, and in several branches of manufacture above
50 per cent., in the case of house-rent, or the wages of
mechanics, it probably does not amount to 20 per cent.
But the business of the statistical enquirer is with the aver-
age, which is, doubtless, from 30 to 40 per cent, on all pay-
ments determined by free competition ; in other words, in
all articles brought to open market. In payments of a dif-
ferent nature, such as professional fees, salaries, servants'
wages, the decrease is as yet inconsiderable ; because in
these there exists no ready appeal to competition, no prompt
means of overcoming the opposition to reduction. In Lon-
don, journeymen in various trades are, in consequence of
their system of combining, still in the receipt of 55. or 6s.
a day, as in the season of war and expensive living ; but
such a state of things must obviously be of short duration.
The fall of provisions, the example of other countries, the
diminished profit of capital, all point to the necessity of a
change, and will eventually overcome resistance, whether
on the part of the lower orders, or of the receivers of pen-
sions and salaries, in whom, possessing as they do better
means of information and comparison, pertinacity in reten-
tion would be more reprehensible. As such reduction
therefore will, in all probability, become general, and the
words, " fall of price," are too limited to express a decrease
of such incomes as arise from personal exertion, we adopt
the more comprehensive phrase of a " rise or fall in the
value of money."
[c]2
[36]
APPENDIX
TO
CHAPTER V.
On Agriculture.
LiMifEI) Operation of our Corn Laws. — Having explained
in the text the rapid fluctuations of our market, it is na-
tural to enquire about the operation of our corn laws, and
to ask, whether they afforded, on such occasions, any tem-
porary relief to our agriculturists ; that is, whether they
contributed to make at all gradual that which political cir-
cumstances tended to render so sudden ? During the war,
our corn laws were, as we have seen, almost always inoper-
ative. At the peace the old limit (665. for wheat) was
allowed to remain in force for a year, and import continued
until March 1815, when the limit was raised to 805. At
present the only question of interest connected with these
transactions is, what would have been the situation of our
agriculturists had the 665. continued, and no advance been
made in our import limit ? The difference would, proba-
bly, have been far less than is commonly supposed.
In the first place, prices during 1815 were so low, that
import would have been out of the question, even under the
old act; while, in 1816, the failure of the harvest was so
great, that our new limit, high as it was, was surpassed,
and our ports opened in November. Import continued on
a very large scale during somewhat more than two years ;
but as it was stopped when our market had fallen very
little below 80s., it may seem somewhat paradoxical to ad-
vance, that the result would have been nearly the same had
import been allowed, until it had fallen to the old limit
of 66s. Our reasons, however, are, —
APP.] On Agriculture. [57]
1. That the quantity poured in during the four or five
months previous to closing the ports in February 1819
was extravagantly large, and would evidently have been
less had the law been such as to allow the corn-merchant
to take time And calculate maturely.
2. That as to the years since 1819, a reduced import
limit would certainly not have raised prices, but at the
same time it would not have lowered them materially, the
continental markets having been, during 1819 and 1820,
less depressed than is generally supposed, and the great
fall taking place only in 1821.
3. Had our limit been 665. instead of 80.?., labour,
working cattle, manure, and the other charges of the farmer
would never have risen so greatly in 1818 ; and our agri-
culture would have known only one great transition — *• that
which immediately followed the peace.
Effect of increasing Population on the Price of Corn. —
The reasoning in the text enables us to^ correct a very
material part of the Report of the Agricultural Committee.
The writers of that Report, in adverting (p. 11.) to the
chance of a futtire deficiency of harvest, advance an opinion
that the magnitude of our consumption, as compared with
that of former periods, must render the pressure of defi-
ciency more severe, and the means of providing against it
more difficult.
" A harvest," they add, " which should be one-third
below an average in wheat, would bring on this country a
very different degree of suffering, and would require a very
different degree of exertion and sacrifice, to supply the
deficiency, from what would have been required under a
similar failure fifty years ago." But to this opinion of the
committee we must oppose a recent and highly important
fact ; viz. that though the harvest of 1816 was (Evidence of
Mr. Hodgson, p. 264.) a full third below the average of
our wheat-crop, yet the degree of public suffering was less
great than would have been experienced under a similar
failure fifty years before. For this there are several
reasons : —
1 st. If the agricultural part of our countrymen increase
their numbers in proportion to the consumers; if the
amount of produce depend on the extent of labour and
capital applied to cultivation ; and if a recourse to the in-
ferior soils mentioned repeatedly in the Report (and in
Mr. Ricardo's well-known work on Political Economy and
Taxation) be far less necessary than an improved cultiva-
[C] 3
On Agriculture. [App.
tioh of the better soils ; we stand nearly in the situation of
our forefathers, and find the prospect of adequacy of sup-
ply very little affected by the increase of our numbers ;
because that increase brings with it the power of augment-
ing our labour, and, consequently, our produce.
2dly. If such be the case at home, the chance of relief
from abroad is decidedly improved, since the extension of
tillage in the course of the last and present age. The sur-
face of corn country in Europe, we mean of country pro-
ducing corn in sufficiency for export, was formerly far
from large; comprising only Great Britain, Ireland, the
North of France, and North of Germany, with part of
Denmark and Poland. We have explained in the text
(p. 149.) the similarity of temperature prevalent throughout
this tract, which is almost all maritime, and presents no
very material difference of latitude. Hence a deficiency of
crop, whether arising from blight as in 1811, or from ex-
cess of rain as in 1809 and 1816, was more or less com-
mon to the whole. But in the last and present age, tillage
has been extended in the interior of Poland, and on the
shores of the Euxine ; countries differing considerably from
ours ift climate, and not likely to be affected by the causes
which create disappointment in the north-west of Europe.
As yet, the produce in these countries is far from large,
but the improvements now taking place in river navigation
bid fair to facilitate the access to several fertile tracts
hitherto in a manner excluded from communication with
the sea. Add to this, that a similar prospect is presented
by the increased cultivation of the United States of America.
To expect a very extensive supply from either would, on
account of the distance, be absurd ; but in a year of scar-
city, an import to the extent of only a week or a fortnight's
consumption has a very sensible effect on our corn market.
It follows that the result, in the present age at least, is
very different from the anticipation of the committee. The
progress of improvement, and the extension of communi-
cation between different countries, which are the accom-
paniments of augmented population, have a very beneficial
effect on the supply of corn : they widen the range of pur-
chase, enable one nation to come to the relief of another,
and convert into the mitigated form of scarcity those
failures of harvest, which, in remote ages, were followed
by all the horrors of famine.
National Disadvantage of a high Price of Corn. — After
all the proofs we have given of the vital importance to the
APF.] On Agriculture. [39]
country of the prosperity of agriculture, we may, without
suspicion of under-rating that importance, subjoin a few
remarks on a subject at present very seldom mentioned : —
the evils that would attend a price of corn materially higher
than that of our neighbours; we mean a price between
705. and SOs. a quarter, while that of France, the Nether-
lands, or Germany was at 4-55. or 50s. The war closed
with so much success in a political sense, with so great an
appearance of national triumph, as to blind us for a season
to our load of taxation, and the embarrassment consequent
on high prices. The disadvantage of the latter was, indeed,
shown in part by the emigration of half-pay officers, annui-
tants, and persons with large families, who drew their in-
come from this country and expended it abroad, giving to
our neighbours the stimulus arising from reproduction,
and subjecting England to an injury of the kind so long
inflicted on Ireland by her absentee proprietors. The
amount thus drawn by emigrants and travellers has been,
we believe, moderately computed, for some time, at
5,000,000/., at present at 4,000,OOOZ. a year; but how
much greater would it have been had a continuance of
high prices induced master manufacturers, or their work-
men, to seek an establishment on the Continent? Those of
our countrymen, who have travelled since the peace, re-
mark, and apparently with justice, that continental manu-
facturers are as yet far from formidable ; but they fail to
take into account the surprising change that might be, or, to
speak more correctly, might have been effected by a trans-
fer of British capital and master- workmen. "With these
potent aids the inhabitants of Normandy, the Netherlands,
or the banks of the Rhine, would soon become dangerous
rivals, for we ought steadily to keep in mind that our
superiority, as a nation, lies not in the individual, but in our
establishments; in the operation of collective bodies : as work-
men, our neighbours would soon attain an equality, were
they placed on a par with us in regard to machinery, and
the division of employment. Their merchants have not,
it is true, the capital necessary to give long credit to cus-
tomers, such as the Americans ; but that want would have
been supplied by our exporters, who, whether they emi-
grated personally or not, would have made a point of pur-
chasing goods in those towns or districts of the Continent,
where they could have been most cheaply manufactured.
Would our government have possessed any means of
counteracting the tide of emigration ? None : if our corn-
market had been kept at an exorbitant height, the tide
[c] 4
[40] On Agriculture. [Aw.
would have flowed in various directions, according to the
respective advantages of particular situations. One part of
the Continent possesses mines of iron, another mines of
coal, a third abounds in timber, while several tracts of coast
approach to ours in the number and capacity of their sea-
ports. Happily no part of the Continent could offer these
advantages collectively, so that although inquiries were made
and calculations formed by many of our speculative men,
no emigration of consequence took place among our labour-
ing classes, and the present prices of the necessaries of life
among us seem to remove such unwelcome enterprises to
an indefinite date.
In reasoning on the means of supporting the lower
orders, we have not laid stress on the effects of spade
husbandry, of deep ploughing, or other agricultural experi-
ments described in late publications. Nor do we dwell on
the practicability of subsisting an increased population by the
more general use of potatoes, although, in 1817, a case in
point was established by the French government, who re-
commended in public orders the more general cultivation
of that root : and it is a curious fact, that it is since the
greatest increase of the population of Ireland that her ex-
port of corn has become large. Our object, however, is
not to dwell on the means of reducing the expence of sub-
sistence ; it is merely to show that increase of population
has no necessary tendency to raise it.
And here we must remark, that, in general, our wish
is less to press a particular opinion in regard to our agri-
cultural prospects, than to shew the uncertainty of many of
the allegations advanced of late years with so much confi-
dence. After the revolutions we have witnessed in statistics
as in politics, it would be idle to attempt predictions either
as to the value of our money, or the extent of our produce.
In this season of profound peace, agriculture occupies a
very large share of the national capital and ingenuity : dis-
coveries and inventions are successively occurring to modify
established methods and alter received opinions. Take, for
example, the subject on which so much was urged in parlia-
ment last session, — the demand of a high protecting duty.
No one can say that our growth will not, during peace,
continue adequate to our consumption ; and if it does,
what will have been the use of these protracted discussions,
and where will be the advantage so confidently promised
to our farmers from that sourcer From these various con-
siderations, ought we not to conclude, that the only safe
course is to be guided as far as circumstances at all permit.
ATP.] Question of a free Trade in Corn.
by general principles, expecting little from any deviation,
however plausible, and calculating that in the price of our
produce, as in other results, this country cannot long differ
from the civilized world at large? This naturally leads to a
brief notice of the
Arguments in Favour of a free Trade in Corn. — Without
any wish to discuss this question at length, we lay before
our readers the opinion of several well-informed writers.
— Extract from a pamphlet entitled, " Observations on the
Commerce of Grain, byDugald Bannatyne, Esq. Secretary
to the Chamber of Commerce of Glasgow," 1816.
" All great authorities," (says Mr. B., p. 10.) "were in
favour of a free trade in corn, until Mr. Malthus demanded
the same protection for the home grower of corn, as for
the home manufacturer of particular commodities: but
these manufactures (such as lace and silk) are productive
of no benefit to the public, being all carried on in contra-
diction to natural and inherent obstacles, while our labour
and capital would find a more beneficial direction, if
transferred to the woollen, cotton, hardware, or other
branches ; in which, particularly in the latter, we possess
local and permanent advantages over our continental
neighbours.
" It seems extraordinary, that we should be so much
alive to the advantages we gain from the division of employ-
ment in the prosecution of our home industry, and not see
the benefit to be obtained from the more extended division
of employment in the case of nations ; a division pointed
out by the separate facilities for carrying them on, which,
from climate, soil, or natural productions, different
countries possess. By keeping up the price of corn, we
oblige ourselves to labour in our manufactures at a great
disadvantage, when compared with other nations."
Extract from a pamphlet, by Major Torrens, published
also in 1816, and entitled, " Letter to Lord Liverpool on
the State of Agriculture."
" To any persons who will either investigate first princi-
ples, or recur to the experience of countries which, like
Holland, have given freedom to trade, it must be evident,
that this natural state of things is greatly preferable to any
artificial system which can be substituted in its stead. As
we extend the area from which subsistence is drawn, the
inequality in the productiveness of the seasons diminishes.
Hence when, under a free intercourse, a deficient harvest
[42] On Agriculture. [App.
required an unusual import, abundant harvests in some
other country of the world would supply the deficiency by
an extraordinary export. On the other hand, a succession
of unusually abundant years could occasion no deep de-
pression in our markets, because this extraordinary quantity
of corn of home growth could not (as when abundant
harvests occur in the case of a country forcing in average
years an independent supply) much exceed the consumption
of the season."
To these opinions we add that of Mr. M'Culloch, who
has inserted an Essay on the Corn Laws, in the same work
as his Essay on Exchange, viz. the "Supplement to the En-
cyclopaedia Britannica. After regretting that the corn trade
was not definitively laid open in 1815, a time when as at
present, our prices were so low that our agriculture had, in
a manner, felt all the evils of transition, and the public
would have reaped the greatest advantage from a return to
unrestricted freedom, Mr. M. adds, —
" When this happy event" (a free trade in corn) " shall
have taken place, it will be no longer necessary to force
nature. The capital and enterprise of the country will be
turned into those departments of industry, in which our
physical situation, national character, or political institutions
fit us to excel. The corn of Poland, and the raw cotton
of Carolina, will be exchanged for the wares of Birmingham
and the muslins of Glasgow. The genuine commercial
spirit, that which permanently secures the prosperity of
nations, is altogether inconsistent with the dark and shallow
policy of monopoly. The nations of the earth are like
provinces of the same kingdom — a free and unfettered
intercourse is alike [productive of general and of local ad-
vantage."
Political economists are more accustomed to deal in
general reasoning, than to analyse the circumstances of a
case, or to go through the details necessary to the sugges-
tion of a specific remedy. This blank we shall now endea-
vour to supply, and, by way of supplement to the preceding
arguments, add a sketch of the preliminaries indispensable
to freedom in our corn trade. By these we mean the ex-
emption of our agriculturists from such burdens as press
on them either exclusively, or in a greater degree than on
the rest of the public. Thus : —
Computation of Poor Rate and Tithe. — Of the sums
levied for rates in England and Wales, the average annual
amount will probably be, ere long, reduced to
An?.] Question of a free Trade, in Corn. [4-3]
Highway rate, county rate, church rate ^1,200,000
Lavr suits, removal of paupers, and expence
of parish officers - 300,000
Maintenance and relief of the poor, after as-
suming ;i large reduction of the present
charge - - 4,500,000
In all - j£'6,000,000
Of this amount what part bears exclusively on agricul-
ture ? To calculate that we begin by excluding
1* The proportion that appears to be raised in
towns, including smaller towns than those
mentioned in the Poor-rate Committee of
1821, p. 13, and referring to the assessment
of 1815, in which a distinction is made be-
tween the contribution of landholders and
householders - ^1,500,000
2. A large sum, which in fact is but nominally
paid by the agriculturists, the wages of
country labour being lower than they would
be without the rates : this sum we estimate
conjecturally, in war at 2,000,000/.; in peace
at- - 1,000,000
Remainder, being the actual burden on agricul-
ture arising from rates, including county
rate, but supposing the whole on a reduced
scale ------- 3,500,000
Total, (agreeing with the preceding) ^6,000,000
Now, were all classes equal contributors to
the rates, the quota of the land would be
only a third, or 2,000,000/., making a de-
duction from the 3,500,000/. of - 1,500,000
Next, as toTithe. — Amount of tithe of England,
Wales and Ireland, computed at the present
low price of produce, including tithe paid to
laymen, about - 4,000,000/.
If tithe also were rendered a national burthen,
the land ought to pay only a third (less than
1,500,000/.) which would form a deduction
of fully - ... 2,500,000
Total deduction that would then be made from
the burdens on agriculture - ^4,000,000
On Agriculture. [App.
It is a remarkable coincidence that this sum (4-,OQO,OOOZ.)
is nearly equivalent to the excess of the burdens on British
over those on French agriculture. See the text, p. 1 69.
As our allowance of 4-,500,000/. for the poor may ap-
pear below the mark, we shall compare it with the rate as
it stood before the late wars: —
In 1792 our poor-rate, exclusive of law ex-
pences, and of highway or county rate,
amounted to about - - ,§£2,000,000
Add an increase of nearly 50 per cent, pro-
portioned to the increase of population - 1,000,000
Add farther for the greater embarrassment of
the present time, and for abuses introduced
into the system ..... 1,500,000
Total - e£4,500,000
Tithe: Mode of computing its present Amount. — Our
estimate is founded on the property tax returns for the year
1812, (Nos. 24-8 and 250 for 18 14-15.) Viewing the ques-
tion historically, we find a very close connexion between
the increase of our population and the increase of our tithe.
As there are no means of ascertaining the amount of our
agricultural produce, our reference must be to the increase
of consumers, and though our population returns go no
farther back than 1801, we may with tolerable certainty
compute the total addition to have been nearly 50 per cent,
on our numbers as they stood in 1 792. In fact, were we pos-
sessed of a correct return of tithe for that year, we shojuld
calculate its present amount by merely adding 50 per cent,
to such return ; for the prices of produce being now similar
to those of 1792, the comparative estimate becomes nar-
rowed to a calculation of quantity.
Rent. — Can we with any confidence observe a similar
rule when calculating the progressive increase of rent?
There the connexion between augmented produce and aug-
mented payment is less apparent than in the case of tithe :
yet it would be obviously vain to attempt another mode of
computation, we mean one founded on the extent of ad-
ditional surface brought into tillage, the 50 per cent, added
to our produce in the last thirty years being raised with an
addition of probably less than 15 per cent, to the number
of acres under corn culture, and having been chiefly the
fruit of the additional labour and improved methods ap-
plied to the surface previously under the plough. The ex-
tension of tillage over inferior soils is rather an index of
APP.] Question of a free Trade, in Corn. [4«5]
augmented rent, than a basis for its calculation : the latter
we should seek by preference in the new methods dis-
covered, the old that are improved, the consequent abridg-
ment of labour, and the additional quantity of corn pro-
duced at the same expence ; for the effect of all improve-
ments, whether they ameliorate quality or augment quantity,
is to cheapen production : they are otherwise not entitled
to the name of improvements.
What, it may be asked, is the benefit to the nation from
such improvements ? The power of supporting an addi-
tional population on the same territorial surface. — And
what is the advantage to the proprietors of that surface ?
An increase of rent which there are, it seems to us, various
reasons for calculating in proportion to increase of popu-
lation. Were the number of consumers stationary, the
result of agricultural improvements would be a fall of mar-
ket price : with an increase of consumers, the result is the
maintenance of price and the rise of rent. If the surface
which, a century ago, produced wheat for the support of
two millions of inhabitants is now sufficient to maintain
twice the number, the price of wheat being the same, we
shall probably deviate little from the truth in assuming
that, in the natural course of things, the rent also ought to
be doubled ; and that any excess or deficiency in this pro-
portion of increase is to be sought in causes temporary, pe-
culiar, or in some cases, little more than ostensible.
How far is this confirmed by historical evidence ? It
seems to have long been the case in France, a country where
corn still sells for the price it fetched a centwy and. a half
ago, and the agricultural history of which is comparatively
simple, being unembarrassed by fluctuations in the value
of the currency, or by insufficiency in the average growth
for the average consumption. But even in England, com-
mercial and manufacturing as she is, the proportion between
increase of population and rise of rent will be found to hold
in a considerable degree. It might be traced, were our
documents complete, during the long period from 1650 to
1792, throughout which the price of corn bore, with casual
and temporary exceptions, a character of uniformity.
Even in the present age, we should not despair of finding a
confirmation of our rule, could we succeed in clearing our
calculation of the perplexing distinction of paper and coin,
of peace and war prices. Such an attempt might, some
years ago, have been ridiculed ; but at present the nominal
part of the increase has disappeared, and left us with the
prices of 1 792, along with a discovery in regard to rent not
[4-6] On Agriculture. [App.
a little at variance with the high-flown language of those
who saw in the war a source of un parallelled wealth ; viz.
that the present rental of the United Kingdom is, or soon
will be, little more than 50 per cent, above that of 1792, or
36,000,000/., instead of 24,000,000/., its supposed amount
before our rupture with France.
This sober result, if it fall below the sanguine expect-
ation of those who still cling to high prices, and still put
faith in the efficacy of corn laws, leaves, on the other hand, a
rise fair and legitimate. And the principle of calculating
the future rise of rent by the increase of our numbers
seems to be fair to both parties. Our landlords certainly
would have no reason to complain of it ; for it presents to
them the cheering prospect of being not only permanent but
progressive.
Reverting to the question of burdens on our agriculture,
we shall leave the land-tax for the present out of the
question ; but cannot forbear adding a few words on a topic
closely connected with the freedom of productive industry,
we mean the increased iise of salt in agriculture. If there
be any accuracy in the arguments of the late Sir Thomas
Bernard, and of several others who have written on the
subject, how sensible must be the benefit to our farmers
and graziers, now that government has given the means of
so decided an extension to the use of salt, either as a manure
or for feeding cattle. Our inland navigation will enable us
to profit largely by the relaxation ; and the injury to the
revenue in one sense will, we trust, soon be compensated
by benefit in another, since the only solid basis of taxation
is the extension of the national industry.
There is thus little or no doubt that were our farmers
relieved from their extra burdens, they would be enabled
to raise produce on as low terms as our continental neigh-
bours, and might, ere long, allow the public to reap all the
benefit arising from unrestricted freedom in the corn trade.
For the present, however, we consider unrestricted freedom
as wholly out of the question, and shall confine our specu-
lations to the effect of relaxation ; of a protecting duty on
a moderate scale.
Comparative Burdens on British and Foreign Agriculture.
— Abstract of the evidence before the Agricultural Com-
mittee (April and May, 1821) of Mr. Tooke, partner in a
mercantile house extensively connected with the Baltic.
APP.] On Agriculture. [47]
Mr. T., aware how greatly the untravelled part of our
countrymen over-rate the cheapness of foreign countries,
laid before the Agricultural Committee (Evidence, p. 224.)
tables of the prices of wheat from 1814 to 1820, at Peters-
burgh, Riga, and Archangel; the result of which is, that
it could seldom, in these years of peace, have been delivered
in an English port for less than from 505. to 60s. a quarter.
At Odessa the price is occasionally very low, but the freight
to England is high ; and the hazard of damage on so long
a voyage is such as to put that port almost out of the
question for the British market. And as to another point,
the amount of supply to be expected from the Continent
at large, Mr. T. concurs with Mr. Jacob, (Evidence,
pp. 232. 360.) that it is in general over-rated.
In regard to our own agriculture, Mr. T. differs ma-
terially from those who imagine that a continuance of the
present low prices would throw much land out of cultivation.
As a fall in the price of corn necessarily reduces the cost
of production, he sees no great reason (pp. 232. 288.) why
we should not, as half a century ago, raise corn as cheaply,
or almost as cheaply, as on the. Continent, particularly now
that the agriculture of Ireland is relieved from restraint.
Mr. T. is also the only witness who brings forward
(p. 288.) an argument which we have been at pains to en-
force in the text, viz. that an import limit, if high, would
induce extended cultivation, and prove injurious to our
farmers. We have his concurrence, likewise, in another
important point, in accounting (p. 344.) for the great fall in
the price of commodities since the peace, less by a recur-
rence to cash payments, than by the application of a great
addition of labour and capital to productive purposes.
Lastly, he is favourable to a protecting duty on corn, pro-
vided (Evidence, p. 297.) it be no greater than the direct
taxes that operate on our own production.
The opinion that our corn is likely to be raised at a rate
nearly as cheap as on the Continent (between 50s. and 60s.
the quarter) has a claim to particular attention ; and we
proceed to enquire how far it is confirmed by a consider-
ation of either our past or present circumstances.
The last Century. — If in the history of our corn trade we
go back sufficiently far to reach a period of profound peace,
we shall find little reason to expect that in such a season
our prices can be kept much above those of the Continent.
Throughout the hundred years that elapsed between the
accession of Charles II. and George III,, corn was as low,
£ 48] On Agriculture. [App.
or nearly as low, in England as in France, the Netherlands,
or other adjacent parts of the Continent. After 1764, the
case was different; but of the 10 or 12s. of additional price
per quarter obtained in this country, the half may safely be
ascribed to temporary causes; we mean the American war,
the extension of our manufactures, and the general aversion
to vest capital in farming, after the discouraging experience
of the preceding age. But our taxation, it may be said, is
much greater, compared to that of continental countries than
it was in the last century, and France is now exempt from
tithe ; — important considerations certainly, but balanced by
others of great weight on our side ; the fact that the tillage
of Ireland is no longer in fetters, that our machinery and
implements have received much more improvement, our
inland navigation a much greater extension than that of
our neighbours. The advantage of all these to agriculture
can be appreciated by those only who have seen the
wretched roads, the clumsy implements and vehicles of the
Continent, or who have duly weighed the cheapness of
our canal carriage, by which salt, manure, or bulky com-
modities generally, can, in many parts, be transported ten
or fifteen miles at the insignificant charge of a shilling a ton.
Our present Prospect. — The arguments in favour of
Mr. Tooke's opinion derived from our present situation are
as follow : —
1. During the war, rents rose without care or exertion
on the part of our landlords ; at present land affords a rent
of consequence only when cultivated with skill — the most
substantial of all arguments for the diffusion of the improved
husbandry.
2. The evils that now bear so hard on our agriculture
are evils of transition; the degree of pressure will be
materially different when farming charges shall have been
reduced (as reduced they must be) in proportion to the
market price of corn.
3. As to the comparative burdens on our agriculture,
and that of other countries, we have in the text taken France
as a fair specimen of the Continent generally : if in Poland
and Russia the burdens are less heavy than in France,
husbandry, as an art, is far more backward, and the charge
of freight to England is heavier. A reference to the
passage (p. 165.) containing the comparison with France,
will much simplify the present statement, enabling us to
leave out of the question the advantage of cheaper labour on
the part of the French, and on ours of better machinery,
lower interest of money, a more advantageous size of farms,
APP.] a Protecting Duty. [49]
&c. After enumerating the respective burdens, we found
the difference confined to a portion of our excise duty on
malt, beer, and corn spirits; a difference which when, as
at present, the corn laws are in a manner inoperative, left
a sum of about 4,000,000/. to the disadvantage of our
countrymen. This difference forms a charge of 7 or 8 per
cent, on the rental of our landlords, and the income of our
farmers taken collectively.
Supposing that the effect of a protecting duty is merely
to keep our market from 5 to 105. a quarter above that of
France, or the Netherlands, as was the case during the
period preceding the war of 1793, would there, in the
event of so slight a difference, be reason to apprehend that
English capital would find its way abroad, and be applied
to the extension of culture on the Continent, with a view to
import into this country ? To such a question our answer
two years ago might have been in the affirmative, but our
charges are now so much reduced, and the advantages of
Ireland in regard to cheap labour, command of water
communication, and fertility of soil, are found to approach
so nearly to those of the most favoured tracts of the Conti-
nent, that we much doubt whether any transfer of capital
would take place to the latter, particularly as on referring
to the evidence annexed to the Agricultural Report we
find (p. 364-) that the cost of raising a quarter of wheat in
Prussia or Poland, including the conveyance to Dantzic,
but exclusive of rent, is about 365. the quarter, an expence
little greater than the cost of raising it (p. 335.) free of
tithe or poor rate, in East Lothian.
Next as to the storing or warehousing of foreign corn,
with a view to import. The interest of the money vested
in the purchase of corn forms so material a part of the
annual charge of keeping it in granary, that a large saving
might apparently be made by purchasing in remote countries
like the interior of Poland or the south-west of Russia, where
the average price of wheat is not above 305. and in some
years (Evidence, p. 364), lower. At present such a course
is out of the question, the inland provinces in these coun-
tries being unprovided either with proper warehouses, or
with the means of giving security to deposited property.
Were these defects supplied by the erection of suitable
buildings in a town adjacent to a navigable river, and by
the protection of a military guard, a large supply of corn
might be warehoused in cheap years, and, on the occur-
rence of a rise, sent to a market in this country or else-
where. The transport to Dantzic or Odessa, added to the
[50] Our Agriculture, $c. [App.
freight from Dantzic to England, or from Odessa to the
south of France, might be averaged at 205. the quarter,
carrying the total cost, when brought to market, to some-
what more than 505. exclusive of our protecting duty.
Next, as to our prospect of supply from the United
States of America. — The great distance of that country
from Europe has long led to the practice of shipping their
produce in the form of flour, rather than of grain ; thus
accomplishing a saving in freight, and avoiding the shifting
and heating to be apprehended in a long and tempestuous
passage. Among other recent discoveries, we are apprized
(p. 437. Revue Encyclqpedique, for August 1821, printed
at Paris,) of a method of preserving flour during several
years in perfect condition, by means of air-tight casks ; but
whether the expence of this or other methods of the kind
be not too great for the chance of profit, remains to be
ascertained.
Compared to these, what means are possessed by our own
agriculturists in regard to keeping over corn, and making
the plenty of one season conducive to the supply of the
next? They have the command of better buildings ; they
pay a lower interest on capital; and are exempt, in a great
measure, from the charge of conveyance to market : their
chief disadvantage lies in the prime cost of their produce.
Those who are inclined to subscribe to the efficacy of
some lately promulgated methods of penetrating more
deeply into the soil, whether by the plough or spade, may
consider the Continent likely to benefit more largely from
them in consequence of its cheaper labour, its greater
agricultural population. But in any improvement arising
from such a process, this country can hardly fail to share
equally, superior as we are in horses, ploughs, and iron-
work generally ; while, in regard to labour, Ireland is as
cheaply and abundantly supplied as any part of the Conti-
nent.
Probable Amount of Import. — A low duty would doubt-
less prevent any considerable rise in our corn market ; but
it by no means follows that our tillage would be much
circumscribed, or that the amount of our import would be
large. Of barley, our growth is in general equal to our
consumption : an import to any extent takes place only in
particular years, and after seasons unfavourable to this
kind of grain, such as the summers of 1816 and 1817. In
oats the case has hitherto been different, our growth being
habitually below our consumption, and large imports being
APP.] Our Agriculture. [51]
required both from Ireland and the Continent : the amount
has varied, of course, in different years, but has not for a
long time averaged so little as half a million of quarters
from either. In future our import of oats, at least in
peace, is likely to be confined to Ireland. Of beans, pease,
and rye, our growth is in general adequate, and our imports
insignificant : but in regard to wheat, our imports, unti 1
lately, were regularly on a large scale. At present such is not
likely to be the case, except on the accidental occurrence
of an indifferent season.
What appears to be the average growth of corn of all
kinds in Great Britain and Ireland f According to Mr.
Colquhoun, it seems in 1812 to have been, including the
corn used as seed, about 40,000,000 of quarters, to which
may be added for increase in the period that has intervened
about 20 per cent, or 8,000,000 of quarters. In reasoning
on years to come, with the prospect of a progressive in-
crease, we shall not greatly err in taking our growth at an
average of nearly 50,000,000 of quarters, of corn of all
kinds. Then, as to import — now that we are in the enjoy-
ment of peace, and possess so ample a command of capital
and labour, we may calculate our average demand for
foreign corn at a very moderate amount ; not more per-
haps than a million of quarters of grain of all kinds, or
2 per cent, on the total of our annual growth.
" All undue protection to Agriculture," says Mr. Ricardo
in his pamphlet on Agriculture, (p. 81.) " should be
gradually withdrawn. The policy which we ought, at this
moment of distress to adopt, is to give -the monopoly of the
home market to the British grower till corn reaches 70s.
per quarter. When it has reached 705. all fixed price and
system of averages should be got rid of, and a duty of 20s.
per quarter on the importation of wheat, and other grain in
proportion, might be imposed.
" This change would do but little in protecting us from the
effect of abundant crops, but it would be greatly beneficial
in preventing an unlimited importation of corn when the
ports were opened. Under the payment of a fixed duty
corn would be imported only in such quantities as it might
be required, and as no one would fear the shutting of the
ports, no one would hurry corn to this country till we
really wanted it. Against the effects of glut, caused by an
unlimited supply from abroad, we should be then amply
protected.
" This measure, however, although a great improvement
[D] 2
[52] Our Agriculture. [App.
on the present corn law, would be very deficient if we pro-
ceeded no farther. To establish measures which would at
once draw capital from the land would, under the present
circumstances of the country, be rash and hazardous, and
therefore I should propose that the duty of 205. should
every year be reduced one shilling, until it reached ten
shillings. We should also allow a drawback of seven shil-
lings per quarter on the exportation of wheat, and these
should be considered as permanent measures.
A duty of ten shillings per quarter, on importation, to
which I wish to approach, is, I am sure, rather too high
as a countervailing duty for the peculiar taxes which are
imposed on the corn grower, over and above those which
are imposed on the other classes of production in the
country ; but I would rather err on the side of a liberal
allowance than of a scanty one."
Ought a Protecting Duty to be suspended in a dear Season?
— However adverse in general to high prices, we are by
no means inclined to give this question an affirmative
answer. The temperature which causes a partial failure
in England being likely to prevail throughout the north-
west of Europe, can hardly fail to raise the corn market
in the Netherlands, the Danish dominions, and the north
of Germany, in the same manner, though not in an equal
degree, as in this country. Prices may thus be brought,
by a natural course, to the limit at which the protecting
duty ceases : if not, a suspension of it would be impolitic*
as well from the general inexpediency of tampering with
an established law as for another reason, viz. that a rise of
price does not (Evidence, p. 36.) in a year of deficiency form
an equivalent to a farmer for short quantity ; he can be
indemnified only by the continuance of the advanced price
during the succeeding year. To that he is fairly entitled :
to deprive him of it by a suspension of the protecting duty,
would be to cast on tillage a discouragement similar to
what it has experienced from unlimited import under the
corn law of 1815.
But in what manner, it may be asked, should we then
lessen to the poor the pressure of a dear season ? By
charitable contributions; which, when limited to an interval
of real want, have few or none of the bad consequences of
an established poor-rate. And in what way are the public
indemnified for taking this burden on themselves instead of
suspending the protecting duty ? By the moderate rate at
which that duty ought to be fixed.
APP.] Our Agriculture. [53]
To these observations we subjoin the opinion of a writer
who differs in many points from the political economists of
the school of Smith.
Observations of Mr. S. Gray on the Corn Trade. — Mr.
G. has given in the papers added in 1819 to his work, en-
titled, " The Happiness of States," an opinion (pp. 34-, 35.)
on the corn trade, similar in most points to that of the
Agricultural Committee. He always considered our late
corn law as likely to make importation affect the home
price suddenly or violently; while a protecting duty would
make it flow in a gentle stream, tending to keep prices fair,
and affording to the revenue a sum which might enable
government to lessen the assessed taxes. He is an advocate
for a free and unrestrained trade in corn, but only when
the intercourse of nations is in other respects free and un-
restrained. A protecting duty would both render our
prices more steady and induce the foreign cultivator to
look to England as a market, on certain conditions ; accord-
ing to which he would regulate his purchase of our colonial
goods and manufactures. This opinion proceeds from a
write** by no means inclined to regard low prices as a
public advantage, but who considers (Happiness of States,
p. 665.) fluctuating gains as highly pernicious, tending to
raise rents and labour extravagantly, and to produce a
premature change in the style of living. The true interest
of the farmer is in a steady price, tending to rise gradually
with the national improvement, and proportioned conse-
quently to the prices of other commodities.
Tenants on Lease, and Debtors on Mortgage. — The case
of a tenant on lease, on the occurrence of a rapid fall of
prices, is peculiarly hard; the evil overtakes him in all its
extent, while the relief is but partial, the grand charge
of rent remaining unadapted to the altered state of things.
He must in the first instance lay his account with a sacri-
fice of part of his capital, with refunding the gains arising
from the previous depreciation of money. This, it must
be confessed, is but fair, since the profit arising during
the war from depreciation was reaped chiefly by the tenant.
But afte>* a certain period of suffering, a liberal land lord will
conside. what is due to equity, and what in many cases,
where the covenants of the lease are not drawn in the
anticipation of such a change, is necessary to prevent injury
to his land. An exception from this course, an example
pf unrelenting rigour in enforcing the payment of an ex^
Our Agriculture.
orbitant rent, would appear to justify an appeal to a court
of justice.
Debtors on mortgage are, in like manner, heavy suf-
ferers, their means of payment generally diminishing as
the value of their money debt increases. They have, how-
ever, in one respect a substantial ground of hope; the pros-
pect of reducing their interest to 4^, and some time hence
to 4 per cent.
Interference by courts of justice. — During the half century
from 1 764 to 1 8 1 4-, the change in the value of money was all
on the opposite side, commodities tending to a rise: gradual,
and almost imperceptible during thirty years, it was after
1 794 so regularly progressive, that in the course of twenty
years 160/. became equivalent to only 100 1. of 1794. Du-
ring the latter years of the war, annuitants, and the land-
lords who had granted long leases, received hardly two-
thirds of the original value ; yet no appeal on the ground
of depreciated currency was brought before parliament or
our courts of justice. Any attempt of that kind in parlia-
ment would have been resisted by government, partly from
an aversion to interfere with private contracts ; more from
a solicitude to prevent the public attention being fixed on
the depreciation then going on in the greatest of all debts,
that of the nation.
Since 1814 we have had a reaction, and of so rapid
a nature, that 100 1. are or soon will be equal to 1407. at
the close of the war. How, it may be asked, does this sud-
den change affect the question of judicial interference ? In
equity, there can be little doubt that all engagements ought
to continue payable in money of the value at which they
were contracted : the objections to interference arise, there-
fore, from considerations of expediency ; from a dread of
litigation among individuals, and a still greater dread of
shaking indirectly the credit of our funds, open as are the
exchequers of other countries to our capitalists. Some
time hence it may, perhaps, be found practicable to com-
bine two very nice points — a farther reduction of taxation
with the preservation of the dividends at their present
value. But on this we cannot now enter ; while as to inter-
vention on the part of our courts of justice, we must add,
that at present it seems out of the question : it could be
seriously expected only in the case of our corn trade being
thrown open, and the continuance of low prices being thus
put beyond all doubt. In any event, it would probably
not go beyond the suspension of legal process for a given
period of years, against a debtor who should have paid or
APP.] Our Agriculture. [55]
tendered in money the chief part (perhaps three-fourths)
of his previously contracted debt: a sacrifice apparently
large on the part of creditors, but which, in very many
cases, may be unavoidable without such intervention, since
a continuance of low prices would involve the majority of
agricultural debtors in insolvency.
Dr. Smith on Agricultural Improvers. — In the Wealth of
Nations (Book V. Chapter II.) Dr. Smith discusses the ex-
pediency of inducing landlords to cultivate for their own
account a portion of their lands, with a view to the dis-
covery and diffusion of improvements in husbandry. He
remarks, in another part, that men of mercantile habits
frequently become successful agriculturists, being more ac-
customed than the hereditary farmer to calculate eventual
advantages, and to hazard an outlay for a remote return.
Had his life been prolonged, he would have seen, during
the war, an ample addition to the list of gentlemen farmers,
and have had occasion, since the peace, to qualify very
materially his favourable opinion of agricultural under-
takings when in the hands of men of other professions.
In his time the practical farmers were comparatively poor
and uneducated : the hope of improvement in husbandry
seemed to rest in the occasional prosecution of the line by
men of different habits. Had the case been otherwise, and
had our northern and eastern counties possessed half a
century ago a tenantry equal to the present, Di\ Smith
would probably have taken a different view of the subject,
recommending that agriculture, like other pursuits, should
be confined to those who had made it their business for
life, and accounting for the success of gentlemen farmers
during the twelve or thirteen years previous to the pub-
lication of his book (1776) by a cause unforeseen, and, in
some measure, accidental,-— we mean the progressive rise of
the price of corn.
Value of Land during the last Century. — In treating his-
torically of the value of land, Mr. Arthur Young in his
"Inquiry into the Progressive Value of Money," 1812,
expresses an opinion, that about the year 1770, estates
sold at thirty-two years' purchase ; a rate higher, compared
to the rent, than they bore during the preceding forty years.
The reason, doubtless, was, that during that long period
we had not an interval of peace of sufficient length to
reduce the interest of money. Next, as to rents, it is a
remarkable fact, that from the beginning of the century
CD] *
[56] Our Agriculture. [App.
until towards 1770, they had hardly experienced any rise,
" A neighbour of mine in Suffolk," says Mr. Young, (In-
quiry, p. 102.) " who inherited a considerable landed pro-
perty, informed me, that in various conversations which
he had, between thirty and forty years ago, (between 177O
and 1 780) with a relation far advanced in years, and from
whom much of that property was derived, that much sur-
prise was expressed at the rise of rents, which then began
to take place. Through the long period of his relation's
experience, no rise was ever thought of; and lease after
lease, in long succession, was signed, without a word pass-
ing on the question of rent : that was an object considered
as fixed ; and grandfather, father and son, succeeded with-
out a thought of any rise : in many cases landlords were
much more apprehensive of losing a tenant at the old
rent, than having the smallest conception of raising it to a
Comparative Price of Wheat on the Continent, and in Eng-
land, previous to the French Revolution.
Official Return of the price of Wheat at the Rosoy, or Paris
Market, by the Septier of 240 Ibs. French.
livres s* d*
Average of the 10 years preceding 17 76 - 28 7 9
Average of the 10 years preceding 1786 - 22 4 7
The year 1786 - 20 12 6
1787 - - - 22 2 6
1788 - - - 24 0 0
Average per septier, during the 23 years
preceding 1789 - 24- 18 2
Reducing this to English measure and money, the ex-
change being then twenty-four livres for the pound sterling,
the result is an average for these twenty-three years, per
Winchester quarter, of 385. 6d. sterling.
At Dantzic the average price of wheat in the twenty
years from 1770 to 1789, both inclusive, after adding 7s,
per quarter for freight and charge to England, was (Evi-
dence, Agricultural Report, p. 366.) about 41s.
But in England, the annual returns of purchase at Eton
market, during the same period give an average of 49s. :
the whole computed by the Winchester quarter.
This difference was not a little remarkable at a time
when our taxation was hardly greater than that of our
neighbours, Arising, in the first instance, from bad sea-
APP.] Owr Agriculture. [57]
sons, it owed its continuance to the extension of our manu-
factures, and to our war with our American colonies, while
the continent of Europe remained in peace.
Export and Import of Corn.
(From the Agricultural Report of June, 1821.)
Quarters.
Exporting period. — In the seventy-six years be-
tween 1697 and 1773 the amount of our ex-
port of corn of all kinds above our import
was 30,968,00
Importing period. — During the forty-two years
from 1773 to 1815 the amount of our import
above our export was about 24,630,000
Ireland. — The import of corn of all kinds
from Ireland to Great Britain, in the thirty-
two years prior to 1806, was only .... 7,534-, 000
But after the act of 1806 had rendered such
import free, it amounted in fifteen years (to
1821) to 12,304,000
[58]
APPENDIX
TO
CHAPTER VI.
On Poor Rate.
(From the Reports on the Poor Laws in 1817 and 1821.)
Table of the Amount expended at different dates on the Poor
of England and Wales, making the year close at Easter,
and adding the corresponding average Price of the Bushel
of Wheat. — These sums are distinct from church, county,
or highway rates.
Price of
Wheat per
bushel.
1748-49-50 - - - average
1 *7*7fi
£\
689,971
1,521,732
1,912,241
4,077,891
6,129,844
6,844,290
7,430,627
6,947,660
S. d.
4 5
6 9
7 7
8 1
12 8
10 0
9 6
7 10
1783-84-85 - - -
1 8O3 .
1813-14-15 - - -
1816-17-18 - - -
1819-20 - - - -
1 R91
Apr.]
On Poor-Hates.
[59]
Amount of Expenditure in each Tenth Year since the middle
of last Century, together witfi the Price of Wheat.
Years.
Expenditure.
Wheat per Bushel.
£.
S. d.
1750
713,000
4 2
1760
965,000
4 10
1770
1,306,000
6 5
1780
1,774,000
5 11
1790
2,567,000
6 4
1800
3,861,000
10 2
1810
5,407,000
12 4
The following are given in successive Years.
Expended on the Maintenance of the Poor.
Wheat per
bushel.
£.
s. d.
Year ending 25th March, 18 IS
6,656,105
16 8
1814
6,294,584
12 3
1815
5,418,846
8 10
1816
5,724,507
7 9
1817
6,918,247
10 11
* 1818
7,890,148
11 3
1819
7,531,651
10 4
- 1820
7,329,594
8 8
- 1821
6,947,6^6
7 10
Return of Poor Rate from London, Westminster, and South-
ward, being from the Parishes within the Bills of Mor-
tality, delivered to Parliament, 2 1st February, 1817.
Total raised in the metropolis,
by poor rate and smaller rates,
such as church rate, highway
rate, &c. -
Charitable donations for parish
schools and other purposes -
Year ending
Easter,1813.
Easter, 18 14.
25th March,
1815.
£.
446,542
18,985
jft
501,952
19,620
£.
489,321
20,160
[<50]
On Poor-Rates.
[App.
Year ending
Easter, 18 13.
Easter,! 8 14.
25th March,
1815.
EXPENDITURE.
£.
£.
£.
Relief and maintenance of the
T poor
370,518
401,954
383,281
Law suits, removals, expense
of overseers and other officers
r 15,324
17,416
17,435
Families of militia men -
'12,916
10,837
6,613
Church rate, highway rate,
county rate, &c. -
98,903
113,574
103,807
Total -
497,661
543,781
508,134
Number of poor relieved per-
manently in work-houses
Out of work-houses, without
13,389
13,373
12,341
reckoning the children
3arishioners relieved occasion-
12,654
13,762
13,341
ally either in or out of work-
houses ....
40,993
69,332
70,322
Total -
67,036
96,467
96,004
The proportion of marriages to that of our population
does not appear to have increased during the late wars :
From 1780 to 1789, marriages, compared to the whole po-
pulation, were as - 1 in 1 1 7
1790 to 1799 - - 1 in 119J
1800tol809 ---- 1 in 119J
(Barton on the Labouring Classes.)
We shall be more successful in searching for an ex-
planation of the rapid increase of our numbers in other
causes : none can be more gratifying than the decrease of
mortality in consequence partly of the introduction of
vaccination, but partly too of the greater sobriety and
comfort of the poor.
Progressive Decrease of Deaths in Great Britain.
From 1785 to 1789
1790 to 1794
1795 to 1799
1800 to 180*
1 in 436
1 in 447
1 in 465
1 in 474
(Barton, ut supra. )
Highway, Church, and County Mate. — These minor
charges form collectively somewhat more than a fifth of the
APP.] On Poor-Rates. [61]
large sum which passes currently under the name of poor-
rate. Are they, it may be asked, likely to experience a
reduction corresponding to that of the fund applied to the
relief of the poor ? As the chief constituent of charge in
these lesser rates is the price of labour, it is evident that
at the reduced wages of the present day, a smaller sum
will suffice for an equal extent of work : on the other hand,
it is very probable that from a sense of the necessity of pro-
viding employment for the lower orders, and of the ad-
vantage of carrying farther the improvement of our roads,
a considerable extension may be given to such undertak-
ings ; none, it is evident, can be more advantageous to
the public, if conducted with judgment and economy.
[62]
APPENDIX
TO
CHAPTER VII.
On Population.
EMPLOYMENT: its Subdivision as Society advances. — We
follow up the reasoning in the text (page 2 10.) by a few
familiar illustrations, for several of which we are indebted
to Mr. Gray's Remarks on Population. — In a primitive
state of society, like that of England in the days of the
Britons and Anglo-Saxons, or like that of the interior of
Norway in the present day, we find the inhabitants dis-
tributed into detached cottages or petty hamlets, each
family being obliged to provide almost every thing for
itself. To cultivate a lot of ground is, in such a state of
things, indispensable ; since no employment, not even those
of first necessity, such as the business of the baker, the
the tailor, or the mason, would occupy the whole of their
time, or prove adequate to their support. Each household
is therefore obliged to build, to bake, to brew, to make and
to mend for itself; how awkwardly and how imperfectly it
is needless to say. To rear a family is to them, whatever
the imagination of poets may figure of these days of sup-
posed enjoyment, a task of greater difficulty than in this
iron age of rents and taxes. Let us beware of forming our
ideas of the condition of our ancestors from the ease of
acquiring subsistence in countries such as the Cape of
APP.] Population, S$c. [63]
Good Hope, Upper Canada, or the United States of Ame-
rica. These enjoy all the advantages of colonies; they
profit by the capital, the activity, the knowledge of Europe,
exhibiting the application of the skill and formed habits of
the old world to the improvement of vast tracts of unoccu-
pied land : they exemplify, in short, almost all the circum-
stances which, in ancient days, led to the rapid growth of
the Grecian colonies in Italy and Asia Minor.
To revert to the characteristics of a primitive state of
society. In the course of ages the hamlet becomes a vil-
lage, and as its population increases, a separation of employ-
ment gradually takes place ; a process which goes on in an
augmented ratio as the village becomes a small town, a
large town, and eventually a city. How far is this sub-
division carried in the case of a population of between 1500
and 3000 ? The more common species of labour, such as
that of the builder, the baker, the butcher, the tailor, the
shoemaker, are separated ; but in other lines the division
is not complete ; the shopkeeper is a linen and a woollen-
draper, a grocer, a druggist, a stationer; the doctor is
apothecary, surgeon, physician ; the lawyer unites the func-
tions of conveyancer, land-steward, and general agent. This
mixture undergoes a decomposition as the inhabitants in-
crease from 5 to 10,000; and in a population of from 10 to
15,000 the various classes, whether of mechanics or dealers,
are tolerably subdivided, at least in our country ; for in
France and most parts of the Continent, the subdivision,
even in large towns, is far less complete.
Subdivisioji of Employment in great Cities. — To mark this
subdivision in all its extent, the observer must repair to the
French, or rather to the English capital, where the mercan-
tile, the manufacturing, the mechanical professions, all as-
sume the most simple form. A London banker, different
from his provincial brethren, issues no notes, and keeps no
interest account with his customers : a merchant confines
his connexions to a few foreign sea- ports, perhaps to a parti-
cular colony or town ; and the name of general merchant,
though not yet disused, is hardly applicable even to our
greatest houses. But it is in the mechanical arts that the
subdivision of employment takes a form the most familiar
and most intelligible to ordinary observation. In London
the class of shoemakers is divided, says Mr. Gray, into
makers of shoes for men, shoes for women, shoes for chil-
dren: also into boot-cutters, boot-closers, boot-makers,
[64-] Population; [Api».
Even tailors, though to the public each appears to do the
whole of his business, are divided among themselves into
makers of coats, waistcoats, breeches, gaiters. In other
lines an equally minute repartition takes place : and as to
the ornamental or elegant arts, such as those of jeweller,
painter, engraver, nothing would be more easy than to ex-
hibit a long list of professions limited to large towns, and
wholly unknown in a thinly-peopled district.
Effect of this Subdivision. — What, it may be asked, is the
practical result of this minute subdivision, this nice distinc-
tion of employment ? By fixing the attention of the work-
man on a single part of his business, it renders him sur-
prizingly correct and expeditious : his performance gains
equally in quality and in dispatch. This is the result of a
mechanical dexterity, acquired without any particular effort
of the mind ; for we must by no means infer that the
quickness characteristic of the inhabitants of a large town,
that promptitude which distinguishes the Londoner and
the Parisian from the hesitation and circumlocution of the
countryman, is the consequence of any innate superiority :
those who walk in a crowd must adopt the step of others,
and advance with the rapidity of the moving mass. The
attainments of these persons, meaning such attainments as
they possess accurately and thoroughly, are often confined
to a few branches ; but these are the objects of their profes-
sion or business ; and the result is, that their work proceeds
straight forward, very little time being lost by them in plan-
ning, altering, or correcting.
Proportion of different Classes in the National Income. — -
In consequence of our insular position, our canals, and our
mines, the proportion of our national income, derived from
manufacture arid trade,, is greater than in most other coun-
tries. The following table is taken, as far as regards its
plan, from a publication by Mr. Gray; but it is subjected
to several modifications, arising in one respect from the late
population return, in another from the fall in the price of
commodities. It is founded partly on conjecture, partly on
official documents.
App.]
Ratio of its Progressive Increase.
[65]
Great Britain distinct from Ireland.
Income of parti-
cular Classes.
Proportion to
the whole Na-
tional Income.
Agriculturists and all engaged in the
supply of subsistence, whether land-
lords, farmers, or labourers
^70,000,000
30 per cent.
Manufacturers and all persons occupied
in making clothing and hardware
46,000,000
20 do.
Mechanics, masons, and all engaged in
supplying houses and furniture
23,000,000
10 do.
The professional classes, viz. lawyers,
clergy, medical men, artists and
teachers, to whom is added a very
numerous, though not an affluent
class, that of domestic servants . .
39,000,000
17 do.
The army, the navy, the civil servants
of government, the annuitants draw-
ing an income from our dividends ;
all, in short, who are paid through
the medium of taxes
46 000 000
20 do
The classes receiving parish support and
other charitable aid
6,000 000
3 do.
Total
^230,000,000
loo per cent.
The sum allotted to the agricultural classes has unfor-
tunately not been earned by them in this season of depres-
sion; but the case must ere long alter; and in a table
intended to be referred to for years, it is fit to keep tem-
porary irregularities out of sight.
In Ireland the distribution of productive industry is very
different from that of England : were it added to our esti-
mate, there would be a great augmentation of the agri-
cultural proportion.
Population ; its different Degrees of Increase.
In a primitive stage of society the rate of increase is,
doubtless, very slow, since no advantage arising from the
boundless command of territory can counterbalance the
anti-population habits of the hunter state. This is suffi-
ciently exemplified among the North American Indians,
and proves that in the early peopled regions of Asia, the
increase, even with the aid of a fine climate, could not
have been considerable until the adoption of pastoral ha-
bits ; nor great, until these gave way to the agricultural
state, in which the augmentation of subsistence concurs
w
[66] Population; [App.
so directly with health of occupation to augment our
numbers.
The Mercantile or Manufacturing Stage. — The last stage
in the progress of society may be termed the mercantile ;
the stage in which a large proportion of the inhabitants of
a country are assembled in sea-ports and manufacturing
towns. Manufactures and trade are by many accounted
adverse to population, leading as they do to sedentary
habits, or prompting a resort to dangerous climates. These,
we admit, are serious objections ; but, on the other hand,
the commercial state is favourable to early marriage, as
will be readily allowed by those who have resided in an
agricultural country like France, and marked how slowly
population increases amidst the penury, the ignorance, and
the unenterprising habits of the tenants of the soil. Add
to this, that many of the irregularities of the manufactur-
ing state have arisen, not from permanent causes, but from
the fluctuation of wages incident to a state of war, or from
the insalubrity of antiquated and ill-planned structures.
Evils such as these are in a state of progressive cure from
various causes, and from none more than that distribution
of population throughout provincial towns which canal
communication so directly promotes, by enabling a parti-
cular place to confine itself to a particular manufacture,
instead of accumulating, as on the Continent, a multitude
of workmen in a crowded and overgrown city. Paris and
Vienna are, far more than London, the centre of manu-
facture for their respective countries ; for France, Germany,
and the Netherlands, united, do not exhibit provincial
towns to be compared to Manchester, Glasgow, Birming-
ham, Sheffield, Leeds. These, and other places of the
kind in England, while exempt, in a great measure, from
the drawbacks of a metropolis, in regard to health and
expence, possess advantages nearly equal, in access to
markets and division of employment. The district of Bir-
mingham in particular, inhabited as it is by several hundred
thousand persons, affords a striking proof that a numerous
population may prosecute manufacture without crowding
themselves into narrow streets or lanes.
Effect of the Enlargement of Farms. — Increase of popu-
lation is conducive to increase of employment in many
respects, in which, at first, we should hardly suppose it to
exert such an influence. Thus the common notion of
small farms being conducive to increase of numbers, is far
APP.] Ratio of its progressive Increase.
from correct, it being, in the first place, impracticable in
these petty occupancies to do justice to the producjiye
powers of the soil, while farms of larger size (from 300 to
500 acres,) have many advantages, admitting of the appli-
cation of machinery and the beneficial employment of
capital. In the next place, it is a remarkable fact, that
while the quantity of subsistence disposable ibr the market
is augmented beyond comparison, the number of persons
supported on the spot is (as we find from die population
retqrns of counties so highly cultivated as Norfolk and
East Lothian) greater than it was in the age of srnajl
farms.
Effect of Machinery on the Condition of the working
Classes. — The effect of mechanical improvement in acjding
to the ipcome of a cpmmunity admits of no dpubt, its re-
sult being to afford a commodity frequently of better qua-
lity, and always at a cheaper rate. To be satisfied of the
latter, we have merely to compare the prices of either
our cottons or hardware of the present day with those of
similar articles made by us thirty years ago, or with those
made at present on the Continent, where machinery is as
yet but partially adopted. But what, it will be asked, is
the effect of machinery on the income and comfort of the
workman ? At first injurious, bringing with it the evils of
transition, which are very serious in a time markepl like
the present, by a great reduction in the demand for hands
for the public service. To take an instance familiar to
those of our countrymen who have resided in France : in
that country coal is very little used, and the general fuel
in town, as in country, is wood : the trees, after being
felled, are cut into short but thick blocks, carted into the
towns, sold in the public markets, and broken up by men
who make a business of it, but whose labour, aided only
by the wedge and saw, is tedious and fatiguing, adding
nearly ten per cent, to the cost of the article. To break
these solid blocks by machinery would cause a considerable
saving of both time and expence, but in the present stag-
nation of the demand for labour, it would be harsh, and
indeed unsafe to resort to such an alternative, without pro-
viding for tjie thousands who would thus be deprived of
employment.
Such, in a greater or less degree, is the case in almost
every transition of importance. Eventually, however, the
hardship is overcome, and the use of machinery becomes
productive of great additional comfort to the lower orders.
M 2
[68] Population:— [App.
To prove that its beneficial effects are general, it is not
enough to cite the prosperity of a few manufacturing dis-
tricts, as the success of these may be accompanied by
distress in other parts ; the prosperity of Lancashire may
cause embarrassment in Saxony, Flanders, or the Banks of
the Rhine. The advantage, then, arising from the use of
machinery, rests on a broader basis ; on that law in pro-
ductive industry which makes every real reduction of cost
an addition to individual income, or, what is the same
thing, to the comforts procured by that income. The
benefit of such reduction is enjoyed by the public at large :
the evil, on the other hand, is partial, being confined to
the manufacturer. He, however, is benefited in his ca-
pacity of consumer, and experiences relief from his distress
as soon as it is found practicable to transfer to a new
branch a portion of the capital and industry hitherto em-
ployed on his own. Such transfers are, it is true, tasks of
great time and difficulty : we have felt them to be so in our
own country, while in others less advanced, they can
hardly be accomplished in the life-time of a generation.
Increase of Population in the present Age. — The recent
increase of our numbers, so greatly beyond that of any
former age, is ascribed by many persons to the excitement
attendant on the war, and to the encouragement it afforded
to early marriage in the case of so many classes, the agri-
cultural, the manufacturing, the mercantile, the mechani-
cal ; all, in short, except the fixed annuitants. But while
we admit this to have been of very powerful operation, we
must put in the opposite scale the serious injury to popu-
lation arising from war, as well by the loss of lives in the
field and in tropical climates, as by the removal from home
of many who would otherwise have become fathers of
families. When to this we add, that since the peace the
ratio of increase is not less great than during the war, we
are led to attribute the augmentation of our numbers to
causes more permanent and satisfactory ; to the preserva-
tion of the lives of children by vaccination; to the better
lodging, the greater cleanliness and sobriety of our lower
classes. This result, already exemplified in a brief return
(Appendix to Poor-rate, p. 60.) will, we believe, be found
to rest on a broad basis whenever our official documents
shall be more ample.
Similar causes prevail, though in a less degree, on the
Continent: in France the increase of population, formerly
so slow as hardly to yield an addition of 30 per cent, in a
Apr.]
Statistical Table of Europe.
[69]
century, may now be computed at somewhat more than
twice that proportion. In that country sobriety was always
prevalent, but the abolition of monasteries, the improve-
ment of medical practice, the ameliorated condition of the
peasantry, are all peculiar to the present age. In Ger-
many the degree of increase is probably not very different
from that of France. Of Russia we have as yet no accu-
rate returns : Spain, Italy, and the south of Europe
generally, are also on the increase, but in a ratio, which,
when we consider the general indolence and poverty of the
lower orders, is, doubtless, slower than that of France.
And in the countries subject to the Turks, the frequency
of the plague, and all the pernicious effects of bad govern-
ment, are likely still to counteract the natural tendency of
population to increase.
STATISTICAL TABLE OF EUROPE, IN 1822.
Total
Population,
Persons
to a
square
mile.
Taxes,
Tithe, and
public
burdens
generally.
Proportion
of such
burdens
per head.
Norway, including Fin-
£. s. d.
mark ...
950,000
6
Sweden, Norway, and
Swedish Lapland
3,600,000
10
Sweden, distinct from
Norway and Swedish
Lapland -
Russia in Europe -
2,600,000
37,000,000
25
23
1,300,000
18,000,000
0 10 0
099
Scotland; viz. the High-
lands distinct from the
low country
30
Turkey in Europe, not
ascertained, but pro-
bably not above
8,000,000
50
5,000,000
0 12 6
Poland, before the par-
tition -
15,000,000
55
Poland, the present king-
dom of, distinct from
the provinces incorpo-
rated with the Aus-
trian, Russian, and
Prussian dominions -
2,850,000
60
1,200,000
O 8 8
Sardinia, island of
520,000
57
Spain -
1 1,000,000
60
6,000,000
0 11 0
Denmark, exclusive of
Faroe and Iceland -
1,600,000
73
1,300,000
0 16 3
Hanover ...
1,300,000
90
900,000
0 14 0
Portugal
3,700,000
90
3,000,000
0 16 3
[E] $
[70]
« Total
Population.
Persons
to a
square
mile.
. Taxes,
Tithe, and
public
burdens
generally.
Proportion
of such
burdens
per hedd.
Switzerland, the twenty-
£ *. d.
two cantons
(The pecuniary bur-
1,750,000
91
430,000
050
den is very small,
but the Swiss afe
liable also to mili-
tary service.)
Wales -
740,000
96
The Austrian empire,
including Lbmbarcty,
., and Austrian Poland -
29;OOOjOOO
112
18,000,000
0 12 4
The Prussian dominions
10,500,000
100
7,000,000
0 13 4
Bavaria -
5,600,000
120
2,5do,ob'o
6 14 b
Sicily, island of -
1,655,000
132
Dominions of the king
of Sardinia; viz. Pied-
mont, part of the
Milanese, the Genoese
territory, Savoy; and
the island of Sardinia
4,000,000
148
2,200,000
0 11 O
States of the Church -
2,450,000
150
900,000
O 7 6
The Neapolitan domi-
nions, including Sicily
France,includhig Corsica
6,700,000
30,7b'0,00-0
154
15-6
2,700,000
37,000,000
O 8 O
1 3 6
Scotland^ the low coun-
try distinct from the
Highlands
156
2 b 0
Great Britain exclusive
of Irelarid (the taxes
computed according to
the value of mohey on
the Continent)
14,500,000
165
40,000,000
2 15 0
Wirtemberj*
1,400,000
170
1,000,000
o 14 4
Saxony ••
Italy, exclusive of Sicily
•1,200,000
17,0*00,000
170
179
900,006
0 15 0
Great Britain and Ire-
land collectively
21,500,000
182
44,006,006
200
The Netherlands*
5,300,000
214
8,000,000
i ib o
Austrian, Italy, or the
Lombardo - Venetian
kingdom -
Ionian islands, republic -
4,000,000
230,000
219
230
2,000,000
100,000
o rb o
089
England, distinct from
Wales - - -
1 1,600,000
232
36,000,000
320
Ireland -
Holland, province df -
7,000,000
760,000
237
362
4,000,000
0 11 0
West Flanders
630,000
420
East Flanders
610,000
554
Europe collectively, a-
bout
200,000,000
58
180,000,000
0 18 0
* The repartition of taxation is here very unequal, the Dutch province**
particularly those of Holland and Zialaflfr, paying much more than II. IQs, »
head ; the Bclgic much lets.
AFP.] Statistical Table of Europe. [71]
These returns, both as to population and public bur-
dens, are, in general, taken from official documents : they
require., however, a few explanations ; thus,
Extent in square Miles. — The amount assigned to Kng-
land, Scotland, and Wales is taken from official returns,
but in regard to Ireland and most parts of the Continent,
the statements are, in some measure, conjectural, and to
be considered only as approximations.
Public Jim-dens. — The sum of 4 1,0 00,0 OO/. as the aggre-
gate of our public burdens, may appear greatly below the
mark, but it is formed by two important deductions from
our present payments : first, by taking credit for some
farther reduction of our taxes, and, in the next place, by
making an abatement (of fully 20 per cent.) from the
numerical amount of our burdens, to bring their value on a
par with those of the Continent, with which they are here
compared.
Population. — Mr. Gray assumes, (Happiness of States,
p. 421.) that an individual for every two acres, or 320
persons for a square mile, would be a fair complement of
population for the soil and climate of Europe. From this
rate, however, we are still at a great distance, having at-
tained it only in Flanders and Holland : in Englarid and
Ireland we are likely, if we proceed as in the present age,
to reach it in somewhat less than twenty years.
In Iceland the proportion is little more than one person
to a square mile, but the lowest extreme of European
population is exhibited in Lapland, where there is iibt more
than one inhabitant to two or three square miles.
Europe taken collectively. — Our estimate is greater in
regard to population, and smaller in respect to public
burdens than that which is at present current on the au-
thority of German statisticians ; but the lattel* made their
computation in or before the year 1817, since which, popu-
lation has increased, and taxation has experienced a partial
reduction.
Progress of national wealth. — A parallel between the
England of 1822, and the England one hundred years
preceding, if made some time back, would have been sub-
ject to much intricacy of calculation, ort account of the
difference in the value of money. Of late, however, com-
modities have fallen so generally, that we are induced to
consider the prospect of continued peace, and of agricultural
supplies on a large scale from Ireland, as likely to bring
our prices nearly to a level with those of the reign of
George I. Those who dissent from this opinion, and who
[72] Population : — [App.
who imagine money to have been formerly of much greater
value, will do well to recollect that many manufactures are
now cheaper than in that age, and that com is very little
dearer. The chief difference, in fact, is in professional fees,
salaries, and wages, all raised during the war, and not yet
brought to a level like the price of produce, manufactures,
or whatever is regulated at an open market. Then as to
the charges of house-keeping in a comprehensive sense, the
difference between the present time and a hundred years ago,
resolves itself chiefly into a difference in the style of living ;
not unlike the existing difference between France and Eng-
land, in which, though the prices of a number of articles
are on a par, the total outlay is less in France, in conse-
quence of the plainer habits of the country.
Comparative Revemie of England and France, (in p. 243.)
Wages. — To put the two countries so nearly on a par in
regard to wages may seem hardly fair towards France, su-
perior as that country is in population, and reduced as
wages now are, or are likely to be among us. But in a
calculation of national revenue, the magnitude of the popu-
lation of France ought, in a great measure, to be kept in
the back ground, many millions being cottagers, who, as
in Ireland, do little more than maintain themselves on
their petty occupancies, consuming few articles productive
to the exchequer, and hardly adding to the national strength,
otherwise than by recruits for the military service. Wages
are highest among a town population, in which England
takes greatly the lead. Add to this, that in all Catholic
countries there is a considerable loss of wages from holidays.
Rent of Houses. — In this respect France was formerly
entitled to rank before us ; but houses in a rural district
yield very little rent ; and while French towns are compa-
ratively stationary, ours have been and continue in a state
of rapid increase.
To those who do not clearly understand in what manner
increase of numbers conduces so directly to increase of na-
tional resources, we would recommend to leave out of the
question the infantine part of society, and to confine their
attention to those approaching to the age of twenty, the
age of productive labour. Our population returns have,
ever since 1801, exhibited an increase of 1^ per cent,
a year ; these persons are now attaining maturity, and ei>-
tering the field as new contributors to our national i
APP.] Comparative Prospects of England and France. [73]
while in France the proportion of such new contributors is,
and has been ever since 1801, not quite one per cent, an-
nually. The effect of this increase of our numbers shall be
farther explained in the chapter appropriated to the pro-
gress of our national resources ; at present we invite those
who imagine that there is somewhat of over-confidence in
the preceding reasoning, to read the following sketch of the
progressive taxation of the two countries, which is, we be-
lieve, sufficiently accurate.
Years.
France.
England.
England, after de-
ducting for differ-
ences in the value of
money.
1550
1600
1660
1700
1750
1790
1822
£ 1,500,000
2,500,000
4,000,000
8,000,000
12,000,000
22,000,000
33,000,000
£600,000
900,000
1,200,000
4,000,000
7.000,000
16,000,000
53,000,000
jCeoo,ooo
900,000
1,200,000
4,000,000
7,000,000
13,OOO,OOO
43.000,000
These sums exhibit the net produce of the taxes, after
deducting the expence of collecting ; and the latter years of
the column of England include Scotland and Ireland.
Backward State of France.
Extract of a letter from Mr. S. Gray to Monsieur Say, printed
in 1817 in the Appendix to the volume, entitled " All Classes
productive."
" In a visit which I made to your country last year, I
confess I did not find such striking or brilliant results.
Travelling partly with a view to ascertain how far the doc-
trines, which I had deduced from the facts around me in
our island, as well as from information, agreed with the
facts found in so populous a state as France, I scrutinized
as narrowly as I could the circumstances of the population.
Considering an extension of buildings, and an improve-
ment in their style, which show the increase of population
combined with the concomitant increase of wealth, as the
surest symptoms of a thriving country, I paid particular
attention to your towns and villages in these points, and am
sorry to say, I saw no progress whatever. I have no re-
collection of any strictly additional buildings : the only new
buildings which I perceived were in some villages that had
been partly destroyed in the conflicts with the invading
armies. In truth, though we also are suffering from an
Population. [Apr.
unusual stagnatioti, I found, at my return, more new houses
going on in the petty suburb of London, Camden Town,
and its neighbourhood, than I had seen in the whole of my
route through France. Every town and every village
seemed stationary. I own, however, I found much of what
I expected, on my principles, from a state so long well peo-
pled. There was an appearance of wealth, though, in ge-
neral, it is true, but of little capital. Your soil is almost
universally under cultivation, but, with some exceptions, in
a very inferior style. Your people are generally employed
and busy, yet not very effectively. Though the population
of France be to that of England only as about 150 to 230
per square mile, France seems to be at a still more consi-
derable rate behind our island in capital, and the results of
active capital. In several statistical points we have gdt the
start of A full century before you."
[T3]
APPENDIX
TO
CHAPTER VIII.
National Revenue and Capital.
Is our unnudl Consumption equal to our anmicd Production? —
In adverting to this subject* our limits prevent our enlarg-
ing on the distinction between productive arid unproductive
consumption, as explained by M. Say and Mr. Mill, or
the riiuch greater latitude given to the term productive by
Mr. Gray. We have, in fact, robhi for little more than
answering the plain practical question* " What part of our
national iricohie appears to be saved or invested, so as to
form a permanent addition to the national property ?"
The part of our income thus appropriated will be found
very small, if considered in the limited sense of invest-
ments in mone^ securities, such as the funds or mortgage,
transactions of that nature, being confined in a great mea-
sure to annuitants, or rather to the comparatively small
portion of them that are opulent. If to these we add the
investments in the form of money in the part of all other
classes, including the saving banks of the lower orders, we
shall probably find for the kingdom at large, an annual
appropriation of 9 or 10,000,000/., the interest of which,
at the present reduced rate, affords an addition of only
3 or 400,000/. to our national income.
But if we take in a more liberal sense the difference be-
tween the revenue and expenditure of the nation, if we
consider as saving or as increase of our stock,, all that is
laid out on the improvement of land, the building or re-
[76] National Revenue and Capital: Correspondence [App.
pair of houses, the increase of furniture, and if to these we
add interest of money saved, we shall find, on the whole, an
addition to our taxable income of nearly 3,000,000/. a
year, rendering it probable that the 250,000,000/. of this
year will in 1823 become 253,000,000/. ; in 1824,
256,000,000/., &c. This result will be confirmed if we
take as a criterion the increase of our population, confin-
ing our estimate to those who annually attain the age of
twenty, the age of efficient labour, and whose number,
following up the outline already given (Appendix, p. 72.)
we calculate as follows.
In 1802 the population of Great Britain and Ireland was
about 16,000,000, the annual increase by births over
deaths, l£ per cent, or 240,000. The individuals then
born, whether male or female, have now attained the age
of useful labour, and must be considered as bearing the
same share as the rest of the population, in augmenting
the national income. In what manner ought the result of
their exertions to be calculated? Our national income,
taken in the largest sense is 350,000,000/. a year, and the
average contribution to it, reckoned per head of popula-
tion, is nearly 17/. Estimated in that proportion the ad-
dition from our new cultivators of the field of national
industry, would be little short of 4,000,000/. a year, but
we prefer the safer course, and reckon as a bond fide ad-
dition to our resources only that income which is subject
to taxes. Now, on dividing the taxable income of the
nation by the number of our population, the result is about
12J. a head as the product of each individual, and the
quota of our new contributors, reckoned by that scale,
approaches to the 3,000,000^. mentioned above.
This will be found a fair and moderate estimate of the
annual addition to our national income. If it be objected
that a deduction ought to be made from our assumed
number of 240,000, on account of the deaths occurring ere
our new contributors attain the age of labour, we answer
that that is amply balanced by the following considerations.
1. The growing increase of our numbers, which, follow-
ing the scale of our population returns for 1803, 4, &c.
will be next year 244,000 ; the year after 250,000, and
seven years hence 270,000.
2. The fact that our new labourers living chiefly in towns
where wages are higher than in the country, their contri-
butions might fairly be estimated at somewhat more than
12/. a head.
8, Particularly as that sum forms the average contribu*
APP.] between Production and Consumption. [77]
tion of our population including all ages, whereas the
240,000 on whom we calculate have attained the age of labour.
A Table of annual Consumption substituted for a Table of
Production. — Since all, or nearly all, that is produced, is
consumed in one form or other, whether productively or
otherwise, and since the taxes of this country are imposed
chiefly on consumption, it will be more suitable to our
general reasoning to exhibit the amount in the form of con-
sumption.
National expenditure or consumption of Great Britain and
Ireland for 1822.
Expended on the produce of the soil for the
food of man, or for purposes of manu-
facture ^117,000,000
On the produce of the mines - - 10,000,000
On manufactures for home consumption - 70,000,000
On houses built or repaired ; on furniture ;
and on improvement of land on whatever
is termed in law real property - 30,000,000
On all goods imported, whether for con-
sumption, such as tea, sugar, coffee; or
for manufacture, as wool, hemp, iron - 70,000,000
On all commodities or products not com-
prized in the preceding - 53,000,000
Total consumption - ^350,000,000
Correspondence of this Sketch with the Calculation of other
Writers.
Mr. S. Gray, in his addition to the Happiness of States,
(p. 636.) computes the total expenditure or consumption of
the population of Great Britain in 1818 at^280,000,000
To which, if we add for Ireland - - 70,000,000
The result is as above - ^350,000,000
Mr. Colquhoun's table of property annually created, will
be found to differ in a few particulars only from our sketch.
The latter leaves out
The produce supplied to the food of horses, horned
cattle, and the lesser animals ; also
The amount of manufactures exported, giving in lieu
of the latter, and of some other heads in Mr. C/s table,
the value of our imports.
[78] National Revenue : Correspondence
Our next inquiry relates to a topic of considerable in-
tricacy.
Proportion of National Expenditure exempt from Taxation.
— In France and other countries of limited trade, the
governments are obliged to impose their taxes chiefly on
production, exacting from the landlord and farmer a pay-
ment equivalent in general to 20 per cent, of their incomes.
With us the form of impost is different : the direct taxes
since the peace are not considerable, but those on con-
sumption have long been, and still are so multiplied, that
many persons imagine that hardly any portion of our ex-
penditure escapes the visitation, direct or indirect, of the
exchequer. In many cases, however, the transit from
production to consumption is too direct to admit of assess-
ment, particularly in regard to the lower orders. The
oats, the potatoes, the kitchen vegetables reared by the
cottager for his family, or by the farmer for his labourers,
though all comprized in our estimate of national consump-
tion, are subject to very slight demands on the score of
taxation.
Case of Ireland. — This is strikingly exemplified in the
sister island, where the taxed expenditure, limited as it is
to the disburse of the gentry, the merchants, professional
men, and the comparatively small portion of the lower
classes residing in towns, cannot, with confidence, be
computed at more than 25,000,000/. But a population of
7,OOOjOOO, supposing their average rate of subsistence not
to exceed that of the English cottage, as calculated by
Sir F. Eden, (between 6 arid 71. a head,) could not exist
without an annual produce of nearly 50,000,000/. ; and if
in forming a calculation for Ireland, we make allowance
for the better circumstances of her town population, and
for the comparative comfort of her linen manufacturers,
we may, perhaps without exaggeration, carry the total
property created in that island to 70,000,0007. a year, which
is in the proportion of nearly 8 to 1 to the sum we have
assumed as representing her taxable income.
That the supposed amount of the latter is not under-
rated at 25,000,0007., is unfortunately too clear from the
state of the revenue, the amount of which, before making
any deduction for collection, hardly exceeds 5,000,0007.,
or 20 per cent, on 25,000,0007., although levied of late
years on nearly the same scale of duties as in England,
where taxation, distinct from poor rate, exceeds 23 per
cent, of the national income. How, it may be asked, does
it happen that the two countries differ so greatly in the
APP.] between Production and Consumption. [79]
proportion of their taxed and untaxed consumption ? Be-
cause three-fourths of the population of Ireland are cottagers,
whose consumption el titles the visit of the tax-gatherer,
their clothing being of home manufacture, their food the
potatoes of the neighbouring field, their fuel the turf of the
common bog. One generation thus succeeds to the poverty
of another, and in the eye of the political arithmetician,
Ireland is rich only in recruits.
France. — This country bears a considerable resemblance
to Ireland in the density as in the poverty of her agricul
turists : their total consumption (exclusive of the food of
horses and cattle) is not over-rated at 1 80,000,0007., but
as in the rural districts of France the excise duties are very
light, taxation in these districts is in a manner confined to
the 4-5,000,0007. of rent ami farmer's income returned as
subject to fonder. The assessment under that head, heavy
as it is, would not, if calculated on the whole produce of the
agriculturists, exceed 5 or 6 per cent. : yet to increase the
amount of this tax is a matter of great difficulty, and the
contribution of French agriculturists to their government
takes place much more in men than in money. In 1793,
when the cause of the revolution was highly popular, an$
the greatest efforts were necessary to repel invasion, the
demand of the government was directed not to pecuniary
aid, but to levies. These, during two critical years, were
supported by the assignats, but after the discredit of that
currency, the power of France would not have been so very
formidable, had not her armies been supported by the
financial resources of the Netherlands.
Such is the state of taxation in regard to agriculturists :
the next question respects the situation of manufacturers.
Among them the proportion of expenditure subject to tax-
ation may at first appear large, the majority of the workmen
residing in towns ; however, a great part of them are indi-
gent, and though the wages of the unmarried are expended
in a great measure on taxed articles, such as beer, spirits,
and tobacco, those of women, children, or the fathers of
families are more strictly confined to the purchase of the
necessaries of life.
Lastly, in regard to the expenditure of merchants,
professional men and traders, foreign commerce, transacted
as it is in sea-ports, and by persons in the command of
capital, creates, for the limited number employed by it,
a great consumption of taxed articles. Of professional in-
come the appropriation, from the respectable station of the
[80] National Revenue : Correspondence
individuals, is similar, but inland traffic comprizes many
persons of a very humble rank, mechanics, labourers, and
others, of whose consumption a considerable part is but
slightly productive to the exchequer.
It would, we believe, answer no useful purpose to enter
on a more minute distinction of the expenditure of par-
ticular classes. Speaking generally, we may assume that
about 30 per cent, of our national expenditure seems ex-
empt from taxation, and that if the whole be computed at
350,000,0007., the taxable part may, agreeably to the table
in the text, be put down at about 250,000,0007., or
260,000,0007.
We may perhaps throw some light on this intricate topic
by adding a few sentences containing the amount of national
income in several of our great departments, with some re-
marks on its appropriation.
Income from the Produce of the Soil, 117,000,0007. — Of
this very large sum, the portion constituting the income of
the landlord and of the higher class of farmers, is evidently
expended in articles subject to taxation; in regard to the
smaller farmers or labourers the case is otherwise, their
principal consumption of taxed articles being confined to
malt liquor.
Produce of the Mines, 10,000,0007. — Here similar re-
marks apply in regard to the rent of the proprietor, the
salary of the superintendant, or the wages of the workmen.
As to the raw material, a considerable duty is raised from
coal, but this charge is avoided on all that is not carried
coastways, or in a particular direction by canal.
Manufactures for home Consumption, 70,000,0007. — The
expenditure on taxed articles in this case arises from the
income of master manufacturers, the salaries of clerks, and
the wages of the less indigent workmen. The same may be
said to apply to the expenditure (computed at 30,000,0007.)
on buildings, furniture, and agricultural improvements.
Income from Trade, Professions, and all other Sources,
100,000,0007. — Under this very comprehensive head, the
expenditure more particularly subject to taxation consists
of the profit of merchants and bankers ; of the income of
professional men; salaries of clerks; income of shop-keep-
ers; wages of ship-builders, seamen, &c.
APP.] between Production and Consumption. [81]
Agreement of the Table of Taxable Income in the text,
(p. 24-9.) with the Amount of our Taxable Income at the
close of the War.
Taxable income in 18 14-.
Great Britain, distinct from Ireland.
Amount assessed for property tax . . . ^156,000,000
Add for various allowances; also for all
omissions and evasions, a supposed sum of 4- 7,000,000
Not assessed for property tax, but subject
to excise and other duties.
Wages and small incomes computed as in
the table in the text, but with two mate-
rial distinctions ; viz. that our population
in 1814- was considerably smaller, but
their rate of wages much higher . . 100,000,000
Total of Great Britain 303,000,000
Ireland, supposed amount of taxable income 35,000,000
Total in conformity with p. 66. of
the text, ^338,000,000
Compare with this the amount of taxable
income in 1822 ^255,000,000
Add a third for the increase in the value of
money since 1813 85,000,000
Farther, for an increase of income calcu-
lated in proportion to the increase of
population, viz. 1 4? per cent 4-6,000,000
In all .... ^386,000,000
Deduct for the general decrease of indivi-
dual income since 1813, whether in
wages, salaries, or profits, a conjectural
estimate of 48,000,000
Remainder, agreeing with the above . . ^338,000,000
National Capital. — Calculations of national capital are
not, perhaps, of great importance in a direct sense, since
taxation has seldom been imposed with reference to the
amount of capital. A table of this nature is, however, of
interest when viewed in connexion with a return of our
national income, and rendered subservient to establishing
the accuracy of the latter; this will, we believe, be the effect
of the subjoined sketch.
The fall of prices attendant on a state of peace is, from (
causes which shall be explained presently, productive of
M
[82]
Estimate of National Capital.
[App.
much less diminution in regard to our capital than our in-
come ; and Mr. Colquhoun's calculation, having been made
on an estimate extremely moderate for a state of war, the
difference between the present year and the year 1812, as
calculated by him, is not considerable. Our table for the
present year is consequently little more than a re-statement
of his results, with a few modifications.
Calculation of National Property.
Great Britain and Ireland.
Computation for
1812, nearly in
the form adopted
by Mr. Colqu-
houn.
A similar com-
putation for
1822.
Land under cultivation, whether in
pasture, tillage, or gardens . .
Farming capital, whether vested in
implements of husbandry and
farming stock, or in corn and
other produce
£ 1,280,000,000
228,000,000
5^1,200,000,000
200,000,000
Dwelling houses, warehouses, and
manufactories ....
400 000 000
400,000 000
Manufactured goods in progress or
ready for sale, whether in manu-
factories, warehouses, or shops :
also foreign merchandize on
hand
160,000,000
140,000,000
British shipping of every descrip-
27,OOO,OOO
20,OOO,OOO
Here it seems fit to make an ad-
dition to Mr. Colquhoun's state-
ments on account of
Mercantile and manufacturing capi-
tal not specified by him, viz.
money in hand ; advances to cor-
respondents abroad ; manufactur-
ing machinery; tools and imple-
1 50,000,000
130,000,000
This carries to nearly 300,000,000/.
our mercantile and manufacturing
capital employed in current business,
and exclusive of whatever capital
our merchants may have in fixed
property, such as the funds, land or
houses.
Such are the great heads of our
national property; the lesser as
given by Mr. Colquhoun, are
7 5,000,000
65,000,000
Canals, tolls, and timber . . . .
50,000,000
45,OOO,OOO
Total
j£2,5 50,000,000
^2,200,OOO,O90
Apr.] Estimate of National CapilaL [83]
This table is to be understood as representing private
property, and exclusive of all public property, such as mi-
litary stores, churches, hospitals; also of such private pro-
perty as is unproductive ; viz. waste lands, furniture, or
wearing apparel ; and finally, of whatever is expressive of
a debt from one part of the community to another, such as
the stocks, mortgages, or mercantile acceptances.
How, it may now be asked, does it happen that the de-
crease of our national property since the peace is so much
less than is commonly supposed ? The reasons are —
Land, as a property, is worth in peace from thirty-two
to thirty five years' purchase ; in war, only twenty-seven or
twenty-eight years' purchase ; so that though on our rental
we reckon a fall of 30 or 40 per cent., the principal has
sunk not so much as 20 per cent.
Farming capital experiences at present a depression
much beyond the reduction in our table ; but its amount
in 1812 was, we believe, under-rated by Mr. Colquhoun,
while, in point of quantity, it has participated largely in
the general increase.
As to buildings, whether warehouses, manufactories, or
dwellings, the surprizing increase in the number appears
fully to have balanced the decrease of rent, particularly as
such decrease appears to have been much smaller in this
kind of property than in land.
In our manufactured and foreign goods on hand the
fall of price, great as it has been, is nearly equalled by the
increase of quantity. In our shipping the case is other-
wise, and we have accordingly made a Targe deduction.
Such is the comparative amount of our national property
in 1812 and 1822, when represented in money of the re-
spective years. But were the real value to be calculated,
the balance would be in favour of the present year, since,
moderate as were Mr. Colquhoun's estimates for a season
of war, his sums would necessarily be less great if extended
at present prices ; and the aggregate would fall short of the
2,200,000,000 assigned by us to the present year.
Were we to take a retrospective view of the value of our
national property since 1792, we should, in the absence of
satisfactory returns for the earlier years, attempt to estimate
it thus : —
Conjectural amount of productive pro-
perty in Great Britain and Ireland in
1792, calculated on the plan of the pre-
ceding table, about j£% 300,000,000
[84] Estimate of National Capital. [App
Add for increase of value in proportion to
the increase of our numbers in the thirty
years since 1 792, being 45 per cent, on
our population in that year .... 585,000,000
Add for a farther increase, rather nominal
than real, in the valuations of the table
for 1822, compared to those which
would be applicable to a similar table in
1 792, there being, in the two periods, a
considerable difference in the value of
money 315,000,000
Total .... ^2,200,000,000
Public Burdens in the present If ear (1822). — Particulars
of the 70,000,000/.assumed in the text, p. 259.
Taxes, gross amount, including both the
charge of collecting and the repayments
in the form of drawbacks, discounts, and
allowances* ^64,000,000
Deduct, not the charge of collection, but the
repayments, which form in fact no part of
our burdens 4,000,000
Remain . . . 60,000,000
Add for poor-rate and tithe, after a deduction
from the payments of 1821, a computed
amount of 10,000,000
Together . . . ^70,000,000
This amount, reduced to money of 1 792 in
the proportion of 120/. to 100/., gives the
sum expressed in the text, viz ^58,000,000
But after the reduction of the taxes on salt,
malt, and leather, the total of our public
burdens, including tithe and poor-rate, will
not exceed . . 67,000,000
Equivalent in money of 1792 to .... 56,000,000
Or, compared to our national income,
somewhat less than 27 to 1 00.
* As the revenue of the current year cannot be ascertained till its
close, we take, with a slight deduction, that of 1821. See the Finance
accounts to 5th January, 1822.
Tithe. All our tables include the tithe paid to lay impropriators,
APPENDIX
TO
CHAPTER IX.
On Fluctwtion of Prices.
(From Mr. Arthur Young's Inquiry into the Value of
Money, 1812.)
Abstract of part of Sir G. Shuckburgh's Table.
The Prices of the Year 1550 are taken for the Integer j viz. 100.
Twelve
Years.
Wheat.
Miscellaneous
Articles, viz.
an Ox, Cow,
Butcher
Meat.
Day
Labourer.
Mean of all.
Poultry, &c.
1550
10O
100
100
100
1OO
1600
—
—
—
—
144
1650
—
239
—
—
188
1675
246
—
166
118
210
1700
—
—
—
—
238
1720
—
4-34
—
—
257
1740
197
492
266
250
287
1760
205
—
400
275
342
1780
—
—
—
—
427
1790
—
752
—
—
496
1795
426
—
511
436
531
1800
TJ~
—~
. —~
—~
562
There are various objections to this table. Butcher
meat is put on a par with wheat, although with the mass of
the population it does not form a fifth part of the con-
W 3
[86]
Fluctuation in the Value of Money.
[App.
sumption. Each of the twelve miscellaneous articles,
whether poultry or cattle, are considered of equal import-
ance, and manufactures of every sort are omitted. There
are, besides, a number of inaccuracies in the authorities from
which the table is compiled.
Comparison of the 1 1th and 1 Sth Centuries. — Bishop
Fleetwood,whose inquiries, in regard to the particular period
to which he confined them, were very accurate, and Dr.
Henry, the author of the History of England, both exhibit
results very different from Sir George Shuckburgh. From
these Mr. Young attempted an estimate on the following
plan.
17th
Century.
18th
Century.
Rise per
Cent.
£. s. d.
£. s. d.
Wheat - ...
1 18 2
1 18 7
Par.
Barley and oats - - -
1 9 5*
2 0 Oi
55
Butcher meat, butter, cheese,
or whatever is the produce
of grass land ...
019
023
28J
Labour ....
0 0 10£
0 1 3
46J
Wool
1 9 H
O 17 8i
39% fall.
Iron -
0 0 If
0 0 If
16^ rise.
Coals
1 5 10$
1 16 0
39i
Repeating wheat five times, on account of its importance,
barley and oats twice, the produce of grass land four times,
labour five times, and reckoning wool, coals, and iron, each
but once, while iron is considered the representative of all
manufactures, the rise from the price of one century to
those of the other will amount to no more than 22J per
cent.; or only the tenth part of the rise stated by Sir
George Shuckburgh.
Manufactures. — Under the important head of metals,
and particularly of iron, Mr. Y. found that the rise for
several centuries had been inconsiderable, the improve-
ments in the process of preparing them sufficing, in a great
measure, to counterbalance the enhancement of labour.
But the great argument against Sir G. Shuckburgh's alle-
gation of general depreciation is to be found in the price of
manufactures, in the production of which, far more than
in agriculture, free scope is given to the application of all
the auxiliaries called forth by the progress of society; we
mean increase of capital, division of labour, and aid from
APP.] Fluctuation in the Value v
[87]
machinery. The following short list is taken from the
books of Greenwich Hospital.
Proportions
Average of the Years Jrom
Shoes.
Stockings.
Hats.
in twenty,
when taken
collectively.
s. d.
s. d.
s. d.
1729 to 1765
3 11
1 7
2 2£
14}
1770 to 1785
3 10
1 5J
2 3*
14
1770 to 1800
4 7£
1 5£
2 4
Mi
1790 to 1800
4 6*
1 6
2 -I
M|
1805 to 1810
R 5
2 2
3 0
20
These are articles of subordinate importance ; but the
fact is, that in almost all manufactured commodities, we are
supplied cheaper than our ancestors, and that a rise, when
it has taken place, is to be ascribed either to a tax on the
raw commodity, or to some cause which may be termed
particular or incidental. In regard to the quality of our
manufactures, we must speak with more hesitation, and can
hardly decide whether the balance be in favour of the
present or of a former age ; for if our fabrics are now much
more neat and convenient, they are in a considerable de-
gree less durable.
Price of Horses and Cattle. — The case is very different
in regard to the produce of our soil, whether we look to
our tillage or our pasture. In comparing the present price
of sheep and oxen with those of a century ago, a great part
of the difference is to be ascribed to the inferior size of the
animal, at a time when the art of grazing was not under-
stood; the same will be found to hold in regard to horses,
and at a later date than is commonly imagined. The only
quarter affording authentic information in regard to the
price of horses is the War Office, from the records of which
Mr. Young extracted the following averages.
Years.
Price.
£.
s.
d.
1766
and 1767
21
0
0
From
1768
to
1792,
both inclusive
23
2
0
1793
to
1802
....
26
5
0
1803
to
1812
....
26
5
0
w *
[88] Fluctuation in the Value of Money.
[App.
The rise of price in this period of forty-six years was
much less than might have been supposed from the rate
paid by individuals. But the War Office, looking chiefly
to strength and the power of standing fatigue, bought,
throughout the whole period, horses of nearly equal value.
Private purchasers were not so easily satisfied; and of the
higher prices so generally paid by them, a considerable
part is to be ascribed to a size and beauty in the animal
which half a century before was comparatively rare.
Sketch of the progressive rise of prices since the thirteenth
century, taking 20 for the integer or highest sum, and ex*
hibiting the other parts by their proportion to it. (Abstracted
from a table by Arthur Young.)
Periods,
Wheat.
Beef and
Pork, from
the books
of the
Victuall-
ing Office.
Labour.
Manufac-
tures at
Green-
wich
Hospital.
Popu-
lation.
Trade,
calcu-
lated
from
our ex-
ports.
13th Century
5£
__
*t
__
_
_
14th ditto -
gj.
—
42.
_
___
15th ditto -
3
_
5i
_
__
___
16th ditto -
6
51
__
^
17th ditto -
9i
__
8
___
__
18th ditto -
9i
12£
__
_
66 years from 1701
to 1766 -
7f
71
10
14-r-
11
5-H-
23 ditto from 1767
to 1789 -
11
11
12i
14
131
gi
34 ditto from 1767
to 1800 -
12
12£
14
15f
15^
11
14 ditto from 1790
to 1803 -
13
17
163.
15^
18^
15i
7 ditto from 1804
to 1810 -
20
20
20
20
20
20
Annual Consumption of Gold and Silver for Plate, orna-
mental Manufacture, and Furniture. — Calculations of this
nature have hitherto been founded on returns from towns
which, like Geneva, were remarkable for the manufacture
of watches, or like Paris and Birmingham, for gilding,
trinkets, and other ornamental fabrics. At present, how-
ever, we are inclined to draw our inferences from a wider
field, from a calculation of the probable amount of indivi-
dual income founded on the public burdens of this and
other countries. If we refer to our property-tax returns
APP.] Fluctuation in the Value of Money, [89]
during the war and make allowance, on the one hand, for
the reduction of income, on the other, for the increase of
numbers that have since taken place, we shall find reason
to estimate the number of
Families in England, Scotland, and Wales pos-
sessing 200/. a year and upwards, at ... 100,000
And taking our island as representing, in point
of income, one-fourth of the civilized world,
we add for the latter, that is, for the rest of
Europe and the United States of America . 300,000
Together . . . 400,000
Families, whose incomes are between
60/. and 200/. a year amount in
Great Britain to nearly .... 400,000
Add for the rest of Europe and the
United States of America . . .1,200,000
Together .... 1,600,000
Now a consumption on the part of the former
class at the conjectural average of 10/. a
family annually, would give .£4,000,000
The same for the second class at the rate of
somewhat less than 2/. per family . . . 3,000,000
Add for the consumption of the lower orders
in watches, ear-rings, buckles, &c. . . . 1,000,000
Total ^8,000,000
These large sums include loss by accident and
wear ; but as a considerable amount of old
plate or old manufacture is annually melted
and wrought up, we deduct as not forming
a demand on the mines 2,000,000
Remainder, being the conjectural amount of
specie from the mines annually required for
plate and ornamental manufacture or fur-
niture ^6,000,000
[90] Fluctuation in the Value of Money. [App.
Comparative Expence of France and England. — Not-
withstanding our great intercourse with the Continent of
Jate years, the public are not yet in possession of a correct
comparison of the expence of living in France and Eng-
land. Nothing is more vague and unsatisfactory than the
notices on this subject in books of travels, proceeding, as
they generally do, from persons who have little idea of
comprehensive calculation, and who allow themselves to
dwell with undue emphasis on a few particular points in
which France happens to differ materially from England.
Such persons seldom make allowance for a countervailing
tendency in other items of the account The proper mode
is to frame a general table, including not only provisions,
house-rent, fuel, wages, but manufactures, and professional
charges. After ascertaining these material points, there
will remain to be made a distinction between different
periods : thus, during the war, particularly in the latter
years, the difference betweeen the two countries was very
great, 100/. in France being equivalent to 150/. in Eng-
land. Since the peace, this difference has progressively
decreased, the fall of prices in France, though not inconsi-
derable, being much inferior to that which has taken place
in England. A comparison made in 1819 would have ex-
hibited 100Z. in France as equal to fully 130/. in England ;
at present (1822) it would not, as far as regards provisions,
exceed the proportion of 1 OO/. to 1 1 51.
After attending to these preliminaries, the progress of
comparison becomes less difficult, and, by balancing one
point against another, is made to assume, at last, a clear
and simple form. Thus, as to the respective capitals, Paris
being inferior in water communication incurs a greater en-
hancement than London in the conveyance of bulky com-
modities, such as corn, coal, wood ; while, in respect to
number of consumers, the cause of enhancement is consi-
derably less, the population of the French metropolis be-
ing only two-thirds of that of ours. These causes may be
said to neutralize each other ; and the inferences are, —
First, that Paris is as much dearer than the provincial
part of France, as London is dearer than the provincial
part of England.
Secondly, that the proportion mentioned above as con-
stituting the difference with England, viz. 30 per cent, in
1819 and 15 per cent, at present, is applicable to the two
countries throughout, provided we confine our parallel to
places similarly circumstanced, comparing Paris with Lon-
don, and Touraine or Lower Normandy, each about 150
APP.] Fluctuation in the Value of Monty. [91]
miles from Paris, with Shropshire, Derbyshire, or other
counties, at a similar distance from London.
Another point to which travellers are seldom sufficiently
attentive is, that the degree of difference between one pro-
vince and another, and even between one country on the
Continent and another, is much smaller than it at first ap-
pears. Take, for example, the north and south of France,
countries very different in climate, produce, and habits.
At first the south appears much cheaper, affording in abun-
dance wine, fruit, and other articles, for which we are made
to pay so extravagantly in England ; but these, on a closer
examination, are found to be counterbalanced by the price
of corn always higher there than in the northern districts
of France. Again, the lower wages of labour, in a back-
ward province like Brittany, make a very slight difference
ultimately, when we take into account the inferiority of the
labourers. Similar remarks are applicable to Germany,
Haly, Switzerland r neither the amount of taxation, the in-
terest of money, the state of husbandry, or any of the main
constituents of price being so materially different as to cause
any great difference in the expence of living. Accord-
ingly, after all the assertions and exaggerations of tra-
vellers, the distinctions on the Continent are merely
1 . That provincial towns are considerably less expensive
than capitals.
2. That by living in a petty town, or in the country, a
farther reduction of expence maybe accomplished, but with
a greater sacrifice of comfort than is implied by a country
residence in England.
3. That in consequence of the want of water communi-
cation, the price of bulky commodities, such as corn or
wood, varies more in the provinces of the Continent than
in the counties of England ; still the difference is less great
than is often asserted, (Edinburgh Review, Vol. LXIV.
p. 362.) land carnage on the Continent being very mode-
rate in consequence of the insignificance of tolls and turn-
pike dues.
4-. That taking France as the representative of the Con-
tinent at large hi point of expence, the difference with
England, great during the war (particularly from 1809 to
1§14), is at present not more than 15 or 20 per cent. ; any
disburse beyond that proportion being attributable, not to
difference of prices, but to additional comfort or luxury.
To what degree did a difference of price exist between
France and England prior to the French Revolution?
[92] Fluctuation in the Value of Money.
Our materials for such a comparison are far from complete :
the tables collected by the late Arthur Young in 1789 in-
dicate a considerable inferiority of price, but the articles
quoted are chiefly agricultural; and had manufactures
been included, the general result would have been less un-
favourable to England. If we revert to a prior date, such
as the middle of last century, we shall find reason to con-
sider the two countries nearly on a par. At that time
England was not much more heavily taxed than France,
nor were our manufactures or corn dearer, for both were
articles of export. The result accordingly is, that prior to
1760 the only material distinction between the two coun-
tries consisted in the style of living ; the proportion of
English population in towns being even then considerably
greater, and the inhabitants consequently requiring com-
forts little known or thought of in the provincial part of
France.
Mr. M'Culloch, in his " Essay on reducing the Interest
on our National Debt," published in 1816, maintains, in
contradiction to common opinion, that the rise in the price
of corn on the Continent during the last half century has,
on the whole, been inconsiderable. He goes into the ques-
tion at great length, treating in succession of France, Spain,
Italy, and the countries on the Baltic, and adducing several
cogent arguments in opposition to those who maintain,
that there took place on the Continent a rise of prices
nearly correspondent to the rise in this country. His con-
clusions are, that in France there was no rise in the price
of corn : that in Italy the rise was a consequence of the ex-
tension given to the freedom of trade ; and that the partial
advance which he admits to have taken place in Russia
and Poland was a necessary result of the degree of im-
provement introduced in the present age into these very
backward countries. To this statement we have merely to
offer the qualifications naturally arising from a state of war.
In the long period from 1793 to 1814 every state on the
Continent was either engaged in hostilities, or obliged to
increase its taxes and military establishment. In all these
was felt a portion of the activity or excitement so conspi-
cuous in England during the war, followed in all by a stag-
nation similar, though not equal in degree, to that which
we have experienced since the peace. The consequence
was, that prices rose during one period and fell in the other;
but to ascertain the extent of change is a matter of great
difficulty, there being few official returns in any part of the
Continent, and the question being somewhat perplexed by
APP.] Fluctuation in the Value of Money. [93]
the circulation of government paper so general during the
war. On the whole, however, there took place, in family
expenditure, calculated on a comprehensive plan, and in-
cluding along with corn and butcher meat, wages, house-
rent, fuel, &c. a rise of from 25 to 30 per cent, on the
prices of 1792; a rise which has, in a great measure, dis-
appeared in the continued reduction since the peace.
In forming conclusions on the price of corn, allowance
ought evidently to be made for particular causes operating
in particular countries : — thus in France, the abolition of
tithe, and the sale of the church lands, promoted tillage to
a degree which nearly counteracted the rise of labour at-
tendant on the war.
Annual Expence of the family of an Agricultural Labourer,
supposed to consist of 5* persons ; being an average of the
expence of 65 families of labourers, in different parts of
England, collected by Sir F. Eden, in 1 796.
Provisions - - <^27 1 8
Rent - 1 13 3
Fuel and candles - 2 10 7
Clothes and washing 418 0
Contingencies 0 10 10
14 4
The same table with an addition of 25 per cent, to the
respective heads of expence, for the rise of prices, between
1796 and 1820.
Provisions - - ^33 17 1
Rent - 217
Fuel and candles - - 3 3 3
Clothes and washing 6 2 6
Contingencies - - - 0 13 7
18 0
At present (1822) provisions are not higher than in 1796.
[9*]
Fluctuation in the Value of Money.
[App.
Conjectural estimate of the expence of a family of the middle
class, living in London or its immediate neighbourhood ;
composed of six persons, including two maid- servants.
Provisions - -
Fuel and light
Rent -
Taxes, assessed and parish -
Servant's wages -
Clothes and washing
Education, repair of furniture, medical at-
tendance, and all contingencies
We have introduced the latter computation chiefly for the pur-
pose of showing that the same heads of expence 'will be
found to bear a very different proportion in different classes /
thus,
^166
13
4
29
3
4
58
6
8
25
0
0
18
6
8
91
13
4
110
16
8
.€500
0
0
Family
of the
Family
middle
of the
class,
agricultural
living in
labourer.
London
on 500/. a
year.
Parts in 100.
Parts in 100.
Provisions
74
331
Clothes and washing -
13
181
Rent
*t
HI
Fuel and light -
7
6
Contingencies - -
H
Assessed taxes and poor-rate
—
5
Servant's wages
Education, charity, repair of furni-
fmmm
31
ture, and all contingencies
—
22
100
100
APP.] Plan for giving a steady Value to Money Contracts. [95]
Table comprisi/i" articles of general consumption, to each of
w/iick is affixed the probable amount of money expended on
it by the public, referred to in the text> p. 278.
Articles.
Quantity
consul mid.
Average
price.
Expended by
the public
on each
article.
Produce of the Soil.
Qrs.
s.
£.
Wheat
12,000,000
50
30,000,000
Barley (used chiefly in the brewery
and distillery) -
Oats (the portion appropriated to
7,200,000
25
9,000,000
human food) -
10,000,000
20
10,000,000
Butcher meat and animal food
generally -
—
—
35,000,000
Manufactures .
The following sums representing
the value, exclusive of exports,
are, of course, considerably be-
low the total of the value annu-
ally prepared -
—
—
Woollens
—
20,000,000
Cottons, (the exports exceed
20,000,000/.) ....
—
—
1 2,000,000
1 '
"~ '
1 5,000,000
Silk
—
' —
8,000,000
Leather
—
—
1 5,000,000
Hardware -
—
9,000,000
Foreign Articles, such as
Sugar -
—
—
9,000,000
Tea- - - - - -
—
_
8,000,000
Various other articles of sufficient
importance to be specified, and
the amount of which it would
probably be practicable to ascer-
tain from official documents -
100,000,000
A multiplicity of articles of less
importance, which being in a
great measure superfluities, and
dependent for their consumption
on the taste of individuals, re-
quire to be noticed no farther
than by assigning to them col-
lectively their proportion to the
aggregate : this proportion we
shall at present suppose to be
20 per cent., or
— —
—
70,000,000
Total annual consumption
—
—
350,000,000
Such is, or rather would be when completed, a table of
our annual consumption at the present time. 'In framin^
[96]
Plan for giving a steady Value to
[Apr:
or correcting such a table, we have evidently to consider
two main points ; the quantities consumed, and the price.
As to quantity, a variation can take place only with in-
crease of population or change of habits, and any alteration
of that kind must be so gradual, that we run very little
hazard in assuming a similarity of amount during a given
period, which, for the sake of precision, we shall suppose
to be five years. As to price, the case is different ; the
produce of the soil may, from casualty in the season, rise
10 or 20 per cent., while our manufactures may experience
a fall. The result, as far as founded on prices, must
therefore undergo some change annually: for the sake of
illustration we shall suppose in one year a change differing
in different articles, but ending in an average rise of 5 per
cent. : thus : —
Articles.
Quantity
consumed.
Average
price.
Expended by
the public on
each article.
Produce of the soil computed on the
Qrs.
s.
£.
same quantities; but ivith\an ad-
dition of 10 per cent, to the
prices.
Wheat
12,000,000
55
53,000,000
Barley ,' -
7,200,000
27
9,900,000
Oats
10,000,000
22
11,000,000
Butcher meat and animal food
enhanced in the same propor-
tion -
_
—
38,500,000
Manufactures; here we suppose
a decrease of 5 per cent. : thus :
Woollens ....
—
—
19,000,000
Cottons
—
—
11,400,000
Linen -
—
—
14,250,000
Silk
—
—
7,600,000
Leather -----
—
—
14,250,000
Hardware -
—
—
8,500,000
Foreign articles.
Sugar the same -
—
—
9,000,000
Tea the same -
—
—
8,000,000
In the other coniponent'parts of
the table the fluctuations are
supposed to change the amount
of 1 70,000,000/. to
—
—
181,100,000
Total -
367,500,000
The final change supposed in this statement is that 1057.
are required to effect the purchases for which 1001. sufficed
in the preceding year.
AFP.]
Money Contracts.
[97]
To those who apprehend the complexity of such calcu-
lations, we would observe, that there would be no ne-
cessity on the part of individuals to ascertain the price and
quantity of every article ; that the details would rest with
persons employed for the purpose; and that the public
would require to know only the result, which, as in the
present returns of the averages of sugar and corn, might
be communicated in a few sentences.
Apportionment of the respective Articles in I lie former Table.
Proportion of
the expenditure
Expenditure
on each article
to the total
Articles consumed.
On ea
Article.
expenditure of
the public,
calculated in
parts of 100.
£.
Wheat -....-
8.57
Barley --..--.
9,000,000
2.57
Oats'
Butcher meat and all animal food
10,000,000
35,000,000
2.8-J
10.
Woollens
20,000,000
5.71
Linen
15,000,000
4.28
Leather
1 5,000,000
4.28
Cottons -
1 2,000,000
5.42
Silk ------
8,000,000
2.28
Hardware
9,000,000
2.57
Sii'Tar ------
9,000,000
2.57
Tea
8,000,000
2.28
All other heads of national consumption
1 70,000,000
48.62
Total -
550,000,000
100
Ought a Table of National Consumption to comprise the
smaller Heads of Expenditure ? — To calculate the smaller
items of expenditure would be a task of great difficulty, and,
as far as we can judge, of little utility, since it is easy to
make an allowance for the proportion omitted. Be-
sides, we ought to introduce into the table no sum of
which the accuracy is not ascertained with considerable
confidence from official documents, and of which the im-
portance is not such as to reward the labour of inquiry
and comparison. Were the articles enumerated to form
only 50 per cent, of the total national consumption, the re-
sult, supposing them to be articles of general use, would
afford a very fair scale for comparing the prices of different
years. A table complete in all its parts would, doubtless,
O]
[98] Plan for giving a steady Value to [App.
be preferable ; but as the heads of our public offices, like our
individual inquirers, are as yet only in an early stage of
statistical research, a considerable time must elapse ere
their materials acquire a finished form.
In the case of the lower orders, a knowledge of the cost
of a few great heads of expenditure, such as corn, coarse
clothing, beer, fuel, would be found sufficient. There
ought evidently to be a material difference in the plan of a
table for them and of one for their superiors, a consider-
ation which leads us to another query in this interesting but
somewhat intricate discussion.
How far are particular Tables required for particular
Classes ? — A scale formed on the table in the text is
adapted to very many persons in the middle and upper
classes, — to the receivers of annuities, whether from the pub-
lic funds or mortgages, — the landlord who depends on his
rent, — the clerk who depends on his salary. But in regard
to several of the classes currently termed productive, the
question is different, as will appear from a reference to a
specific case, such as that of
Farmers on Lease. — The situation of the farmer on
lease, though materially affected by the value of money in
purchase, depends still more on the price of the produce
he raises : — of corn, if his occupancy be chiefly under the
plough ; of butcher meat, butter, cheese, if it be chiefly
grass land. Leases ought thus to be drawn with a re-
ference to the market price of produce, computed on the
average of a series of years. Or, if a regulator of a more
comprehensive character be desired, the price of the pro-
duce might be combined with a table of the price of com-
modities generally, (Appendix, p. 95.) taking the latter as
the basis ; but modifying its result by repeating the price of
corn or of butcher meat a certain number of times, so as
to give due weight to these main constituents of the income
of the lessee.
The average rate of labour, an object of the first import-
ance in farming, might, in like manner, be added to the
table, and repeated several times.
Mines. — In an undertaking of this nature, the profit
evidently depends on two points : the market price of the
articles produced (whether coal, iron, tin, or copper) ; and
the average rate of the labour by means of which it is
rendered saleable. There are thus two ways of stipulating
the conditional amount of the rent : by a table confined to
the rate of labour and the price of the article produced ; or
by a table of the price of commodities generally, (as in p.
95.) with such repetitions of the rate of labour, or price
APP.] Money Contracts. [99]
of the article produced, as the contracting parties might
think expedient.
TitJve. — The case of tithe is different from that of rent,
It is in evidently more convenient to clergymen that the
price of commodities generally should be the standard,
than the price of agricultural produce. The latter deter-
mines, it is true, the ability of the payers of tithe ; but as
the payers are many, and the receivers comparatively few,
as that which to the latter forms the whole of income is to
the former only a portion of their disburse, the circumstances
of the clergy have a claim to prior consideration ; that is,
without showing the slightest partiality to either party, equity
suggests that the regulation of clerical income should be
made with a view to the value of money in the purchase of
commodities generally, and not exclusively in the purchase
of corn, which can form hardly a fifth of their expenditure.
It would be no difficult task to suggest farther modifica-
tions for different lines of business ; but to enter into detail
seems wholly unnecessary, since every thing in the pro-
posed plan is voluntary, and may be adopted or omitted,
as may suit the interest, or imagined interest, of the con-
tracting parties. We shall, therefore, take leave of the
question, after answering, by anticipation, a few objections,
as follows :
1. Need there be any apprehension of a combination to
produce undue returns of prices for the purpose of affecting
the standard, of particular contracts ? — Attempts of that
nature are very little to be dreaded in so extensive a country
as this : they could be effectual only if undertaken through-
out the whole kingdom, and persevered in during a series
of years ; a course which would suppose a command of
capital, and a degree of concealment, wholly at variance
with probability.
2. Would a measure of this nature be likely to affect the
sale price of other property, in particular, of lands and
houses? — The majority of fund-holders are, as we shall
explain subsequently, permanent depositors ; strangers to
the manoeuvres of the Stock Exchange, and almost as little
inclined as our land-holders to engage in speculative sales
and purchases. But there is another class, persons retir-
ing from business, succeeding to property, or having, from
any other cause, funds of which they are desirous to make the
investment. To these persons stock would, by the measure
in contemplation, be rendered more eligible as a permanent
deposit, and the motives for purchasing landed property
would in some degree be lessened. But the eompkimt of
[«] 2
[100] Plan for giving a steady Value to
[App.
the country gentlemen does not regard inadequacy of sale
price : instead of the 26 or 27 years' purchase to which
they were accustomed during the war, land will now sell for
34- or 35 years' purchase : their desideratum is an assured
income, — relief from present pressure ; and such, to a cer-
extent, would be the result of the proposed measure.
3. It may be objected to our table, that " it does not
comprise any heads of expenditure, except those represented
by commodities ;" while a considerable part of the disburse
of the middle classes (not less than a third), is of another
description, as appears from the concluding line in the fol-
lowing sketch :
Proportions in 100 of
each head of expence.
Provisions
Clothing and washing -
Fuel and light
House rent
Other charges, namely, wages, as-
sessed taxes, education, medical
attendance, &c.
33
18
6
10
33
100
To the objection that might be founded on a statement
like this, our answer would be, that the money paid for
wages, education, professional aid, &c. is ultimately ex-
pended on commodities ; and were the case otherwise,
there seems no necessity that a scale should comprise all
the items of expenditure. But supposing, for the sake of
illustration, that such were the case, the political arith-
metician might divide our population into twelve, fifteen or
more classes, taking as an auxiliary in his computations the
returns under the property tax, with the estimates of Sir F.
Eden, Mr. Barton, amd others, and forming out of the
whole a general table : thus,
B
1
S •
£
.fcp
] J|
Families.
1|
1
1
1H
I
G 1
o *a
ffi§
i
A
^ ^2
w?8
Of a cottager expending
£.
£.
£. *.
£. *.
£. s.
only 371. a-year - -
27
5
1 15
2 10
0 15
Of a mechanic in town ;
expending 52/. a-year
Of the middle class, ex-
37
7
3 0
3 0
2 0
pending 250/. a-year
105
55
35 O
20 0
35 0
Ditto, expending 500/.
a-year - -
167
92
83 0
30 0
128 0
APP.] Money Contracts. [101]
To these there would of course remain to be added a
number of classes of various rates of expenditure.
Were it intended to compute from such tables the con-
sumption of the nation at large, the obvious course would
be, to form a product by multiplying the sums in each
column by the number of families in each class. A sketch
on the above plan might receive improvement by a sub-
division into a variety of columns, distinguishing the head
of incidental charges into wages, taxes, medical attendance,
education, &c. But we need enter into no farther explan-
ation, since these tables, however proper for particular
classes, must, in a general view, present a very uncertain
conclusion. They are, besides, not wanted in regard to
the national consumption ; because the desired result may
be obtained in a more simple and satisfactory form by the
mode already pointed out.
[102]
APPENDIX
TO
CHAPTER X.
On Finance.
SiNJHNG Fund. — On this subject a few explanatory pa-
ragraphs may be acceptable to those of our readers who
are not initiated in the mysteries of the Treasury or Stock
Exchange.
The Supplies constituting our Sinking Fund. — The com-
plex form of our budget, and the appearance of inviolability
given to the sinking fund, may induce persons in common
life to imagine that that fund derives part of its income
from taxes vested in the commissioners, and managed by
them without reference to the rest of the revenue. The
appropriation, however, never went so far : the income of
the Sinking Fund, paid to the Commisioners at the bank
arises chiefly from
1st. The 1,000,OOOZ. (increased in 1702 to 1,200,0007.)
annually payable out of the general revenue.
2d. The dividends of redeemed stock, which, standing
in the name of the Sinking Fund Commissioners, are con-
sidered as entitled to interest at the quarterly payments
at the bank in the same manner as the rest of the public
debt.
3d. The surplus interest provided on contracting each
loan since 1793. This provision, adopted by Mr. Pitt on
the suggestion of Dr. Price, will be understood by sup-
posing that the loan for a particular year is 10,000,000/. at
5 per cent, for which stock given in the 5 per cents, at par,
APP.] On Finance: the Sinking Fund. [103]
involves an annual charge of 500,tiOO/. Now the plan was, to
provide taxes yielding not 500,000/. but 600,000/. a year,
the lOOjOOO/. rotating a land for the gradual extinction of
the principal — a purpose which in the case in question
would be accomplished in 37 years.
The merits or demerits of this plan of surplus interest
are now only matters of historical curiosity, the season of
loans being past, or at least suspended. The question,
however, is not merely arithmetical : it is, in a great mea-
sure, similar to that of the expediency or inexpediency of
war taxes ; and if the war was a season of large profits,
it was evidently politic to make it bear as large a portion
as possible of our burdens. It is in a consideration of this
nature, and not in the imaginary advantage of compound
interest, that we are to seek for a justification of the mea-
sure of providing a surplus interest; we mean for a
counterpoise to the sacrifice with which it may easily be
shewn to have been attended.
Ought the nominal Sinking Fund to be kept up ? — It was for
some timeaquestion whether, when oursinking fund exhibited
a surplus, which, for illustration, we shall call 17,000,000/.,
and the revenue a deficiency which we shall term
12,000,000/., the better plan was to leave the 17,000,000/.
to operate in weekly purchases for the redemption of stock,
and supply the revenue deficiency by a loan, or to adopt
the more simple course of receiving from the sinking fund
the 12,000,000/., and confining the redemption purchases
of the commissioners to 5,000,000/. This gave rise to
considerable discussion in the first years of peace, the
former plan being maintained by the converts to the doc-
trine of compound interest, the believers in the arithmetical
wonders of Dr. Price. But in 1819 ministers consented to
adopt the latter course, and found in it, (see Ricardo
on the Funding System, in Napier's Supplement to the
Encyclopaedia Britannica,) a degree of advantage which
may be said to have given the first blow to the complex
plan of paying with one hand, while we borrowed with the
other.
The topic was again brought under discussion last
session, in the debates on the plan for converting our half-
pay and pensions into long annuities. On that occasion
ministers, unwilling to part with the semblance, after they had
relinquished the substance of the sinking fund, urged for a
time the expediency of making the requisite loans from the
public, but were at last persuaded to follow the direct
course, and to admit of the loans being made from the
[G] 4
[104] On Finance. [App.
portion of revenue at their disposal. The sinking fund is
thus divested of its complexity, and brought back to a form
from which, as far as we can judge, it ought never to have
been made to deviate, that of the balance of current revenue
applied to the redemption of stock.
Comparison of our present burdens mth those of 1792.
Amount of taxation, tithe, and poor rate, in
Great Britain and Ireland in 1792 - ^22,000,000
The increase of our population since then
(nearly 50 per cent.) enables us, without
additional pressure on the individual, to
bear a farther burden of - 11,000,000
Continental countries, our competitors in
productive industry, having, in general,
increased their burdens in a ratio some-
what greater than their population, we are
justified (see Appendix, p. 14.) in regard-
ing a corresponding increase on our part,
as not detrimental to our foreign trade.
We add, on this account, a sum of - ^5,000,000
The money in which taxes were paid in 1 792,
being, when compared with our present
currency, as 100 to 120 in value, we make
a corresponding insertion of - 7,000,000
on the ground that to that extent, the ex-
cess of our present taxation over that of
1792, is nominal.
Amount of burden which can be borne by
us at present, without greater disadvantage,
in comparison with other countries, than
we experienced in 1792 - ^4-5,000,000
We here assume the increase of population as the mea-
sure of the increase of national wealth, arising from our
various improvements in agriculture, manufacture, naviga-
tion, &c. This proportion will be deemed considerably
below the mark, by the majority of those who write or
think on such subjects, whether it be the convert to Mr.
Gray's doctrine, (p. 229.) that in the progress of society
individual income increases in a larger ratio than population,
or the practical observer, who founds his calculation on the
surprising improvements, bysteam machinery and otherwise,
during the last thirty years. These arguments rest, doubt-
less, on a very substantial basis, and nothing but the unfor-
APP.] The Sinking Fund. [105]
tunate fluctuations in individual property, attendant on our
rapid transitions, would have prevented us from insert-
ing a larger sum (probably 16 or 18,000,000 instead of
11,000,000/.) as the measure of the increase of national
wealth, arising from our improvements.
Correspondence of the table with our previous calculation.
— We have already, in the text, (p. 259.) calculated the in-
crease of our burdens since 1792, compared to our resources
in the proportion of 1 8 to 27. A similar result will be found
to follow from the preceding table; the 45,000,000/. in
which would form a burden of only 18 per cent, on our
resources as in 1 792, while our actual burdens amount (p.
259, and Appendix, p. 84.) to 27 per cent.
The Malt Tax. — The hopes of the agriculturists were
at one time excited by the expected repeal of a large share
of the duty on malt ; but, while we sympathize with their
sufferings and anxiously desire a diminution of their tithe and
poor rate, we cannot help expressing a doubt of the expe-
diency of any great reduction of taxation on an article al-
ready so much cheapened by the fall of the materials.
Sudden changes are to be avoided: malt liquor comes
only in some respects, under the description of a necessary
of life ; and the extended cultivation of barley that might
have been prompted by a reduction of duty, would probably
have prevented any material rise in the price.
[106]
Population.
To Mr. Rickman, Clerk Assistant of the House of
Commons, (who has prepared the successive Population
Abstracts of 1801, 1811, 1821,) I am indebted for much
useful information, in particular for
A Comparative View of the Area and Productive Power of
the several Counties of England and Wales.
COUNTIES ACCORDING TO THEIR AREA.
Counties.
Square
Statute
Miles.
Counties.
Square
Statute
Miles.
1. York - - -
5,961
30. Surrey
758
2. Lincoln
2,748
31. Berks -
756
3. Devon
2,579
32. Oxford
752
4. Norfolk
2,092
53. Bucks
740
5. Northumberland -
1,871
34, Worcester -
729
6. Lancaster -
1,851
35. Hertford
528
7. Somerset
1,642
36. Monmouth-
498
fl. Southampton
1,628
37. Bedford
463
9. Kent -
1,537
38. Huntingdon
370
10. Essex -
1,532
39. Middlesex *
282
11. Suffolk
1,512
40. Rutland
149
12. Cumberland
1,478
13. Sussex
1,463
England -
50,535
14. Wilts -
1,379
15. Salop -
1,341
16. Cornwall
1,327
1. Carmarthen
974
17. Gloucester -
1,256
2. Montgomery
839
18. Stafford
1,148
3. Glamorgan -
792
19. Durham
1,061
4. Brecon
754
20. Chester
1,052
5. Cardigan -
675
21. Derby -
1,026
6. Merioneth -
663
22. Northampton
1,017
7. Denbigh
633
23. Dorset -
1,005
8. Pembroke -
610
24. Warwick
902
9. Carnarvon -
544
25. Hereford
866
10. Radnor
426
26. Cambridge -
858
11. Anglesey
271
27. Nottingham -
837
12. Flint -
244
28. Leicester
804
29. Westmorland
763
Wales -
7,425
Total -
57,960
Scotland and Ireland are nearly equal to each other in Area, and to-
gether are equal to or somewhat larger than England and Wales. The
Assessed Rental of Scotland in 181 1 was .£3,899,364.
AwJ
Population.
[107]
COUNTIES IN ALPHABETICAL ORDEK.
I.
II.
III.
IV.
Counties.
Square
Rental
Annual
Resident
Statute
of
Value of
population,
Miles.
Land.
Sq. M.
1821.
£.
£.
Persons.
Bedford ...
463
272,621
619
85,716
1 Jerks
756
405,150
611
131,977
kicks ...
740
498,677
713
134,068
Jambridire
858
453,215
571
121,909
Chester -
1,052
676,864
684
270,098
Cornwall -
1,527
566,472
470
257,447
Cumberland
1,478
469,250
327
156,124
Derby
1,026
621,693
624
213,353
Qevon ...
2,579
1,217,547
516
439,040
Dorset
1,005
489,025
538
144,499
Durham -
1,061
506,065
500
207,673
Essex; . - .
1,532
904,615
692
289,424
Gloucester
1,256
805,133
680
'335,843
Hereford •»
860
455,607
085
103,231
Hertford -
528
342,550
734
129,714
Huntingdon •
370
£02,076
574
48,771
Kent -
1,537
868,188
651
426,016
Lancaster -
1,831
1,270,344
718
1,052,859
Leicester -
804
702,402
891
174,571
Lincoln -
2,748
1,581,940
594
283,058
Middlesex
282
349,142
1,525
1,144,551
Mon mouth
498
203,576
436
71,855
Norfolk -
2,093
931,842
509
344,368
Northampton
1,017
696,637
702
162,483
Northumberland
1,871
906,789
52O
198,965
Nottingham
837
534,992
659
186,875
Oxford -
752
497,625
709
154,327
Rutland -
149
99,174
692
18,487
Salop
1,341
738,495
610
206,266
Somerset -
1,642
1,355,108
876
355,314
Southampton -
1,628
594,020
43 5
282,203
Stafford -
1,148
756,635
693
341,824
Suffolk -
1,512
694,078
537
270,542
Surrey ...
758
369,901
550
598,658
Sussex -
1,463
549,950
445
232>9£7
Warwick ...
902
645,139
744
274,392
Westmorland -
763
221,556
299
51,359
Wilts
1,379
810,627
652
222,157
Worcester -
729
516,203
772
184,424
C East Riding - '
C 190,709
York < North Riding
5,961
3,111,618
541
< 183,694
(West Riding }
( 800,848
England
50,555
27,890,354
595
11,260,555
[108]
Population.
COUNTIES IN ALPHABETICAL ORDER.
I.
II.
III.
IV.
Counties.
Square
Rental
Annual
Resident
Statute
of
Value of
Population,
Miles.
Land.
Sq. M.
1821.
£.
£.
Persons.
Anglesey -
271
65,121
288
45,063
Brecon
754
108,446
154
43,613
Cardigan -
675
101,550
173
57,31 1
Carmarthen
974
224,152
244
90,239
Carnarvon
544
90,848
192
57,958
Denbigh -
633
182,674
331
76,511
Flint
244
118,615
536
53,784
Glamorgan
792
210,760
284
101,737
Merioneth
663
83,451
137
33,911
Montgomery
839
152,008
198
59,899
Pembroke -
610
160,617
284
74,009
Radnor
426
88,250
229
23,073
Wales -
7,425
1,586,498
235
717,108
Total -
7,960
9,476,852
549
1,977,663
Column I. The Area of these counties was measured on
Arrowsmith's last map (date 1815—1816), which was
formed on the trigonometrical survey. The process
of squaring and computing the miles, as well as of esti-
mating the parts of miles on the borders of each county,
having been performed with much care and labour, the
inaccuracies are few and inconsiderable.
Column II. The Rental is taken from the Property-tax
return for the year ending April, 1811, (see p. 66. of the
Property Tax Accounts, printed 26 Feb. 1813.) The
fall of rent on the one hand and extension of culture on
the other, probably render this return, though com-
paratively of old date, a tolerably accurate representa-
tion of the present rental of the kingdom.
Column III. Annual Value of Land by the square mile of
640 statute acres. This is computed from the " rent and
tithe collectively," and the average of England and Wales
in 181 1 was lls. 2d. per acre : the counties which take the
lead are Leicester and Somerset, and the chief cause of
superiority is the extent of good pasture ground, which,
of course, yields a return at little expence. %
One method of computing the productiveness of land
under Ullage is to " take for each county the number of
APP.]
Population.
[109]
families employed in husbandry, and to divide by it the
amount of rent and tithe." The result may be said to ex-
hibit the " average net produce of the labour and capital of
each family thus engaged," and indicates, we believe with
tolerable accuracy, the progress of the improved husbandry.
For England and Wales the average, in 1811, was 41 /.
The proportion was by no means greatest in the counties
adjacent to the metropolis ; for while in Hertfordshire and
Surrey it varied from SQL to 40/. per family of agricultur-
ists, in Lincoln and Durham it exceeded 50/., and in
Northumberland went considerably beyond that amount.
A return of this nature, made after rents assume a settled
form, would evidently be a very interesting document.
CENSUS OF 1821.
England, Scotland and Wales ; Increase of the Population
since 1811, exhibited by Counties.
Counties.
Increase
percent-
from
1811 to
1821.
Counties.
Increase
)ercent.
from
1811 to
1821.
Counties.
Increase
per cent,
from
1811 to
1821.
Peebles -
1
York, E. Rid-
Durham
17
Sutherland
1
ing -
14
^inlithgow -
17
Perth -
3
Aberdeen
15
Somerset
17
Forfar -
6
Bute
15
Banff ~
18
Kincardine
6
Perby -
15
jloucester
18
Salop 6
Devon -
15
Norfolk
18
Kinross -
7
ilssex -
15
Bedford
19
Berwick
8
Inverness
15
Chester
19
Nairn -
9
Kirkcudbright
IS
Cornwall
19
Clackmannan
10
Montgomery -
15
[Denbigh
19
Merioneth
10
Northampton
15
-jncoln -
19
Hereford
Radnor -
10
10
Nottingham -
Orkney and
15
jrlamorgan
Middlesex
20
20
Roxburgh
10
Shetland -
15
Warwick
20
Elgin -
11
Hampshire
15
York, N. Rid-
Argyle -
Berks -
12
12
Wilts -
Worcester
15
15
ing ^ -
Cambridge
20
21
Stirling -
12
Brecon
16
Renfrew
21
Westmorland
12
Dorset -
16
Anglesea
22
Dumbarton -
15
Flint
16
Ayr - -
22
Dumfries
IS
tlertford
16
Pembroke
22
Fife
13
Huntingdon -
16
Surrey -
23
Haddington -
13
Leicester
16
Sussex -
99
Ross and Cro-
Monmouth -
16
York, W. Rid-
marty
13
Northumber-
ing -
23
Oxford -
13
land -
16
Wigton -
24
Rutland
15
Stafford
16
Lanark -
27
Selkirk -
13
Suffolk -
16
Lancaster
27
Buckingham -
14
Cumberland -
17
Caithness
29
Cardigan
14
Carmarthen -
17
Edinburgh
29
Kent
14
Carnarvon -
17
[110]
Population.
[App.
The ratio of most frequent occurrence is 1 5 per cent., or
an average between 13 and 17 per cent. In several
counties the augmentation is to be ascribed to the increase
of the principal towns ; thus the increase of Middlesex is
the increase of London, Surrey of Southwark, Warwick-
shire of Birmingham, Lanarkshire of Glasgow, and Lan-
cashire of Manchester, Liverpool, Preston, &c. In the re-
mote county of Caithness, the increase is owing to the ex-
tension of the herring fishery ; while the almost stationary
condition of the adjoining county of Sutherland is owing to
the emigration of cottagers, and the conversion of their
petty occupancies into pasture ground.
England and Wales : Progressive Increase of our Population.
Its amount in 1801 - - 9,343,578
Ditto 1811 - - 10,791,115
Ditto 1821 - - 11,977,663
Progressive Increase in the Ten Principal Towns of England.
Year 1801.
Year 1811.
Year 1821.
London
900,000
1,050,000
1,225,964
Manchester
81,020
98,575
135,788
Liverpool -
Birmingham
77,655
75,670
94,576
85,755
118,972
106,722
Bristol
65,645
76,455
87,779
Leeds -
55,062
62,554
83,796
Plymouth -
45,454
56,060
61,212
Portsmouth
52,166
40,567
45,648
Norwich
56,852
57,256
50,288
Newcastle-on-Tyne
28,565
37,587
46,948
Scotland. — Here the ratio of increase in the towns,
particularly Edinburgh and Glasgow, has been equally
great.
'Ireland. — The returns previous to 1821 were too
imperfect to afford the means of calculating the progressive
increase of population, nor have those of last year as yet
been given to the public in a satisfactory form : the general
result is, that the population of all Ireland amounts in round
numbers to
That of the principal towns,
Dublin -
Cork -
Limerick
- 7,000,000
186,276
100,535
66,042
APP.] Population.
Great Britain : Return of 1821.
[Ill]
Distribution into Classes.
Families.
Proportions to
the whole popu-
lation in parts
of 100.
Employed chiefly in agriculture
Do. in trade, manufactures, me-
chanical employment, &c. -
In all other situations - - -
978,656
1,350,293
612,488
S3
46
21
100
Proportion of Agricultural Population. This varies
greatly, according to the particular county. In a highly
manufacturing county, such as Lancashire, it is not half the
above average ; in Yorkshire, which in the West Riding is
manufacturing, and in other parts agricultural, the return
approaches to the average, but is still somewhat below it ;
while in Sussex, Essex, Suffolk, where there are so few
manufactures, it greatly exceeds it, being above 50 in 100 ;
in Cambridgeshire, Bedfordshire, and Herefordshire, the
proportion is the largest of all, being above 60 in 100.
Census of 1377. — As a matter of historical curiosity, we
subjoin the population of the principal towns of England in
the year 1377, when an enumeration was made on account
of a poll-tax :
London - - - 35,000
York - - 11,000
Bristol - - - 9,000
Plymouth - 7,000
Coventry - 7,000
Norwich ... 6,000
Lincoln - - - 5,000
Sarum, Wiltshire - 5,000
Lynn - - - 5,000
In that remote age the total population of England was
2,300,000; but the proportion of town population was far
smaller than at present, since the number of towns contain-
ing above 3000 inhabitants was only 18.
Colchester
Canterbury
Beverley
Newcastle-on-Tyne
Oxford
Bury, Suffolk - -
Gloucester C Each
Leicester < somewhat
Shrewsbury £more thanj
4,500
4,000
4,000
4,000
3,500
3,500
3,000
The Questions of Depreciation
at any subsequent aera in the war? This inquiry,
brief as we shall make it, requires an attentive
notice of our situation relatively to the Continent
at particular periods. — The preliminaries of peace
between France and Austria were signed at Leo-
ben in April 1797, a few weeks after the exemp-
tion act, and though the definitive treaty (that of
Campo Formio) was not concluded till the autumn,
there existed little doubt of its taking place, and
it is a well known fact, that, from several causes,
money, in the course of the summer, became less
scarce. This was also a time of naval success, and
though the dread of invasion continued, we have
the authority of the Bullion Committee (Report,
page ^7) that the Bank ought to have met an
alarm of that nature by a liberal issue of their
notes. Be this as it may, it seems extremely un-
likely that at any time in 1797, after the preli-
minaries of Leoben, ministers would have adopted
a measure so new and questionable as the suspen-
sion of cash payments.
The succeeding year was one of peace on the
Continent, and of prosperity in this country. The
renewal of operations by land in 1799, was a mea-
sure less of the French government than of us and
our allies, a measure which, perhaps, we should
not have adopted without the confidence inspired
by the exemption from cash payments. In what
manner did the renewal of hostilities affect the
state of our circulating medium ? For some time
the effect was inconsiderable, but the case became
very different after the failure of the harvest : the
period of two years that elapsed from that failure,
until the certainty of a favourable crop in 1801,
would, without the exemption act, have recalled
all the difficulties of 1796, and we by no means
and Or cr -issue. 113
venture to assert that ministers would have for-
borne a recourse to that measure.
The preliminaries of peace with France were
signed in the autumn of 1801, and there ensued a
long interval of ease in regard to financial and
commercial affairs. Even in 1805, when we again
roused the Continent to arms, and subsidised not
only Austria, but Russia, the pressure on our ex-
change was temporary ; for this was no season of
indecisive warfare, of protracted operations : our
allies had now an antagonist who brought a cam-
paign speedily to issue ; and who, at Ulm and
Austerlitz, effectually relieved us from the pressure
of subsidies. In 1806 and 1807, part of our allies
continued in arms, but they were not supported
by ministers on a scale productive of pecuniary
embarrassment, and our corn imports were fortu-
nately not of a magnitude to press on the ex-
change.
There thus elapsed a period of seven years
without a recurrence of derangement in our con-
tinental exchanges ; but a very different prospect
was opened by the events of 1809 ; by our aug-
mented expenditure in the Peninsula, and the
necessity of large purchases of corn. Had our
bank-paper been at that time demandable in cash,
we should, doubtless, have experienced great dif-
ficulties, nor would the public, ardent in the cause
of Spain, have hesitated to support ministers in
any measure that promised an addition to our
pecuniary means. There is at the same time,
equally little doubt, that without the previous ex-
istence of the exemption act, and the confidence
inspired by its till then successful operation, we
should not have interfered with the freedom of
American navigation : we would have studied
The Questions of Depreciation
more carefully its effect on our resources, and
have cherished it as a fund for our continental
expences. Our ship-owners might have clamoured,
and individual members of the cabinet might have
been rendered converts to their views, but the
opinion of the bank directors would have been
hostile to such a measure ; and the danger pointed
out by the solitary voice of Mr. Baring (Inquiry
into our Orders in Council) would have been
brought before government with all the weight of
that powerful body.
The next and concluding object of our inquiry
is, to what degree did the exemption from cash
payments increase to government the means of
exertion on the Continent? By substituting at
home paper for metallic currency, it enabled us to
send abroad our gold coin, the amount of which,
very differently as it has been computed, (Bank
Committee Report, May 1819,) was, probably, not
far short of 20, 000,000 /. sterling; — a most sub-
stantial aid, doubtless, but one which was, in a
great measure, exhausted in the first three years
of trial, 1799, 1800, 1801. From that time for-
ward, the portion of gold coin in the country
appears to have been comparatively small : at all
events it was found quite inadequate to the de-
mand in the second period of trial, 1809 and 1810,
the exchange having fallen rapidly as soon as the
pressure on it became considerable.
The extent of direct aid arising from the ex-
emption act, seems accordingly to have been li-
mited to the amount of our gold coin ; but we
should enter into a much wider field were we to
calculate the augmentation of our financial means
by->the other results of the act, the comparatively
moderate rate of interest, and increased facility of
and Over-issue.
discount. After every deduction for exaggeration,
and after ascribing the greater share of our finan-
cial resources to the bold plan of raising the sup-
plies within the year, there still remains a large
amount referable to the effects of the exemption
from cash-payments. Of the extent of aid arising
from such a source, some idea may be formed by
those who have visited the Continent, and observed
how slowly productive industry advances in a coun-
try like France, where, even in peace, 6 or 7 per
cent, is the current rate of interest.
This benefit we experienced without much alloy,
until the five last years of the war, when the de-
preciation of our paper on the Continent caused
a sudden increase of our foreign disburse, and
some time after, an increase less sudden, but of
greater amount and permanency, in our expendi-
ture at home. The losses hence arising may, we
believe, without pressing the point to an extreme,
be carried to 1 00,000,000 /., and if we charge on
the exemption act a large portion of the present
distress of our agriculturists, conducive as that act
certainly was, to the fluctuation in the value of
money which has been, and will be productive of
great embarrassment, until wages, salaries, and
prices shall be accommodated to the new scale, it
becomes a question, whether the amount of benefit
derived from the exemption in the period preced-
ing 1809 has not been balanced, perhaps more
than balanced, by the loss and pressure of the sub-
sequent years. This point, however, we have no
wish to urge, and stiU less the speculative ques-
tion, whether, without the aid derived from this
act, our government would have carried on the
war so long, or on so expensive a scale : our
i 2
[116] Agricultural Repmi of 1821. [App.
ceived an increase: but the virtual encouragement, that
which had a real and extensive operation, was the high
rate of charge incident to imports in the late war, particu-
larly in the latter years of it. The corn-law was in general
inoperative : yet no period was more marked with improve-
ments in agriculture, and none offered more substantial
reasons for submitting to parliament the expediency of an
import of foreign corn, without any burden except that of
such a fixed duty as might compensate to the British
grower the indirect encouragement given to him during the
war by the high freight and other charges.
Compare the period of 1713— 1756 with that of 1773—
1814, recollecting that the former was a term chiefly of
peace, and the latter chiefly of war ; that during the for-
mer the market-interest of money was generally below, and
during the latter frequently above the rate fixed by law ;
and farther that in the one the legislature granted a bounty
on the export of corn, while during the other agriculture
had no such stimulant. It will then be found that in the
early period our agriculture was comparatively stagnant, but
in the latter in a state of rapid extension and improvement.
Oughtitnottobeinferred that there was nothing in the bounty-
system that necessarily promoted agriculture, — nothingin the
comparative abstinence from interference that was incompa-
tible with its prosperity? If, before 1773, the quantity of wheat
raised in Great Britain was only 4,000,000 of quarters, and
if at present it is more than double; if since that time the
number of cattle and sheep has been vastly augmented, and
their breeds improved ; if scientific drainages have been
effected, and extensive wastes inclosed ; it can surely not be
said that there has been a want of encouragement to invest
capital in agriculture. The farther improvements made
within the same period; the canals, the roads, the bridges,
the harbours, and the docks that have been either formed
or improved, not by the public revenue but by the capital of
individuals : the unexampled extension of manufactures and
trade ; the augmentation of internal wealth, which defies
all comparison with any former portion of our history or
of the history of any other state ; — all this makes the
Committee incline to the opinion that the only solid founda-
tion of agricultural prosperity is laid in abstaining as much
as possible from interfering, either by protection or prohibi-
tion, with any branch of industry. Can commerce expand,
manufactures thrive, and great public works be undertaken,
without affording increased means of payingfor the production
of the land ? Must not the principal part of thoseproductions,
Apr.] Agricultural Report of 1 82 1 . [117]
which contribute to the gratification of the wants and desiivs
of the community at large, be drawn from our own soil, —
the demand increasing with the population, the population
with the wealth of the state; — and does not a great part
of the capital employed in supporting our manufactures,
trade, and public works, pass, by a very rapid course, into
the hands of the occupier of the soil? Has not agriculture
languished formerly in our own country, and at present in
other naturally fertile regions, from the want of such a
stimulus; — and in these countries are not the proprietors
of land poor, and the people wretched, in proportion as
the labour of the population is exclusively confined to the
cultivation of the soil ?
It will be for parliament to appreciate this view of the
subject, and in its measures to reconcile it with the considera-
tions which forbid, on the one hand, that we should render
ourselves too dependent for subsistence on foreign supply ;
or on the other that we should create by artificial means
too great a difference between the cost of subsistence in
this and in other countries : — a difference which might
have the effect of driving capital abroad, and of leaving our
unpaid population to be maintained by the landed interest
with diminished resources.
Disadvantages of the Corn-Law of 1815. — The principle
of this law is to exclude foreign corn in seasons of abund-
ance, and to give every facility to its introduction in years
of scarcity. Adapted as it appears to such a purpose, its
practical operation will often be found at variance with its
object : aggravating at one time the evils of scarcity, at an-
other increasing the depression of price arising from abund-
ance. Its enforcement prompts the grower to extension
of home-cultivation, by the hope of a monopoly price ;
while its occasional interruption rmiy deprive him of it
when most wanted. To the consumer it holds out the
prospect of a trade occasionally free, but so irregular as to
baffle calculation, and to involve the dealer in more than
the ordinary risks of mercantile speculation. At one time
it exposes our market to be occasionally over-loaded with
foreign corn: at another, in the event of a considerable
deficiency in our own harvest, it creates a competition on
the Continent, by the effect of which prices are rapidly
raised against us.
If on the expiration of the summer quarter, (15th August,)
our average price of wheat was 79s. llr/., our ports, under
the present law would remain shut till 1 5th November : but
if that average were 80s. Id., whatever were the prospect 6t
DO 3
[118] Agricultural Report of 1 8 2 1 . [ A PP.
an abundant harvest, the import would be open during six
weeks or three months. In the former case, the prices
might rise very high before we received any considerable
supply : in the latter, a rapid import might reduce them to
a level to which they would otherwise not sink. This was
strikingly exemplified with regard to the import of oats in
the autumn of 1820, when, on the opening of our ports, a
rise of from 30 to 50 per cent, occurred in several continental
markets, the shortness of the time allowed for import causing
the shipments to be made in great haste. In England,
prices fell, but not in time to stop these imprudent adven-
turers ; and a great loss was sustained both by the conti-
nental shipper and by the British farmer. Yet the amount
of this import, (about 727,000 quarters,) was not a thirtieth
of the annual consumption of oats in Great Britain.
Examples of extreme Fluctuation. — The degree of fluctu-
ation in our market under the act of 1815 has been great
almost beyond example. Between January, 1816, and
June, 1817, the price of wheat varied from 535. to 1 125. ;
while in the three months which ensued from June to Sep-
tember, 1817, it varied farther from 112s. to 74<5.
How far has this system in its favour the sanction of
long usage ? Its present form dates only from 1815, pre-
viously to which our corn-law knew, on the one hand, no
absolute prohibition ; on the other, no import - without
the payment of some duty, great or small. The pro-
visions of the act of 1804? were that, when the average-
price of our wheat should be between 635. and 665.,
foreign wheat might be imported on a duty of 25. 6d. per
quarter ; and when our currency rose to 665. or upwards,
that duty was reduced to 6d. per quarter. When our
average was under 635. the import was subject not to abso-
lute prohibition, but to the high duty of 24-5. 3d. ; which,
however, generally operated as a prohibition.
Uncertainty of the Price of Corn. — What are, on a series
of years, the comparative chances of deficient crops in
this country and on the Continent? They are probably
greater in this country, since, from our less extensive terri-
tory and less varied climate, the effect of unfavourable
weather in one district is not likely to be balanced by "an
opposite effect in another. The climate of Ireland being
more variable than that of England, the hazard of deficiency
would be augmented if our dependence on Ireland increased.
A similar result would probably follow by extending the
cultivation of our poorer soils, which are more likely to be
affected by ungeriial season:?.
Arr.] Agricultural Itepot t <f 1 82 1 . [11 9]
No article experiences so great a change of price as corn, in
proportion to any excess or deficiency in the supply. Mr.
Tooke, a witness particularly examined on this point, ex-
plained this fact as follows : A fall in the price of any com-
modity, not of general necessity, brings the article within the
reach of the consumption of a great number of individuals;
whereas, in the case of corn, the average-quantity being suf-
ficient for the supply of every individual, all beyond such
average-quantity operates to depress the market. The con-
sumption of corn is doubtless, greater when it is cheap than
when it is dear, but in a small proportion to the surplus
arising from one or two abundant seasons; understanding by
an abundant season not one in which a deficiency of one kind
of corn is made good by the surplus of another, but in
which the leading articles of consumption are simultaneously
abundant. Our growth is probably equal on an average to
our consumption ; and as long as the British grower
retains the exclusive supply, the fluctuation of our prices
must range between 805. as a maximum, and as a minimum
the lowest price to which one or more abundant harvests
may bring our corn, until it finds a vent in exportation, or
is raised at home by the occurrence of an unfavourable
season.
Reasoning from the past, what prospect appears of a rise
of prices from the recurrence of an unfavourable season ?
Dr. Smith, and Mr. Burke in his " Thoughts and Details
on Scarcity," agree in an opinion, founded apparently on
long observation, that favourable or unfavourable seasons
occur not at short intervals, but at rather long cycles,
and irregularly. If that opinion be well-founded, the
Committee need not add how hazardous must be the situ-
ation of the grower of corn, in a country in which the
lowest price accounted necessary to afford him a remunera-
tion considerably exceeds the prices of the rest of the
world.
Remunerating Price. — The estimate of a remunerating
price appears to be subject to much misconception, for that
which was deemed such in 1815 may be more or less than
a remuneration in 1821, under a very different state of
things. On the one hand, the sum of 805. may now repre-
sent a considerably greater value ; while, on the other, if
the necessity of increased supply requires a resort to inferior
land, it may have become eligible to plough up tracts
which in 1815 would not have paid lor cultivating. Jf the
necessity of indemnifying the cultivator of the inferior soils
should lead to our raising the import-limit above 80.$. per
[H] 4
[120] Agricultural Report of 1821. [Arp.
quarter, an undue profit would accrue to the owner or
occupiers of the superior soils whose charges would not
have been increased. It would thus appear necessary to
advance, from time to time, our import-limit, though the
charges of raising corn on good soils should remain the
same ; and if, in other countries, prices did not undergo a
corresponding rise, the result of every such advance must
be to expose us to greater and more grievous fluctuation.
The scarcities of the present age have furnished us in some
degree with a knowledge of the amount of aid that can be
afforded by the surplus-produce of the Continent. Any
rise in our present import-limit would discourage the exten-
sion of that supply: — it would tend to aggravate the fluc-
tuation, and other inconveniences, which appear connected
with the principle of alternate monopoly and free import.
A Protecting Duty. — Our past experience is decidedly
in favour of a repeal of our present law, and of laying open
our trade in corn with all nations ; subject only to such a
duty as might compensate to the British grower the loss of
the encouragement arising from the high freight and other
import-charges during the last war. Such duty ought to be
calculated on the difference of expence between this country
and those from which our principal supplies have usually been
drawn, taking into account the freight and other import-
charges. The Committee are, however, fully aware of the
unfitness of such a change at this moment, when a great
accumulation has taken place in our warehouses as well as
in the shipping-ports of the Continent. The present price
is too low to represent the cost of corn, even to the foreign
grower : it is the result of a general glut, and of an extreme
distress on the part of those by whom it has been raised, or
by whom it is held.
Is it not practicable, however, to modify the operation
of our corn-law, so as to prevent, on the opening of our
ports, the introduction of foreign corn in a sudden and
irregular manner ? This, in the opinion of the Committee,
might be attained by imposing a fixed duty on the import
of foreign corn ; accompanying, however, this duty with a
reduction of the present limit, that the price might not be
raised beyond what it might reach under the existing law :
an effect which the Committee are very desirons of avoiding.
When corn shall have reached some given high price, the
duty should cease altogether.
The Rate of such Duty. — What, it may be asked, ought
to be the new import-limit at which corn might be admitted,
subject to duty ? This the Committee do not profess to de-
16
A PP.] Agricultural Report of 1821.
termine : but it evidently ought to be such as not to place
the occupier of our inferior soils in a worse situation than at
present. Without inquiring how far the cultivation of these
inferior lands may have been expedient, the Committee can
have no difficulty in stating that capital already vested should
be protected against revulsion : but farther the protection
ought not to go ; since the growth of our population and
the accumulation of our internal wealth will continue to
give, as they have given during the last sixty years, the
most effectual encouragement to agriculture. Nothing is
to be dreaded, as long as our institutions afford security to
capital and industry ; — as long as capital and good faith
keep pace with that security, and we avoid any course
which might drive capital to seek a more profitable employ-
ment in foreign states.
The principles of the freedom of trade are now almost
universally acknowledged to be politic as well as liberal :
but, while it is the duty of parliament to revert to these
principles as far as they are practicable, in the corn-trade
as in other branches, it is also incumbent on it to spare
vested interests, and to deal tenderly even with obstacles to
improvement when created by the long existence of an ar-
tificial system. In all their suggestions, the Committee are
desirous to secure the country from a dependence on other
states for subsistence; and still more to preserve to the
landed interest the weight and ascendancy which it has en-
joyed so long, and used so beneficially.
Effect of Taxation on Agriculture. — A comparison of
the amount of our taxation with that of other countries, as
they stood in 1792 and as they now stand, might, if con-
fined to an arithmetical statement, lead to an unfair estimate
of the increase that has taken place in the interval. Con-
sidering public burdens with reference to population, Eng-
land is the most taxed portion of Europe, excepting perhaps
Holland : but, measuring them by the aggregate of national
capital, or of national income, the proportion of the taxes
to the income or capital of each individual is perhaps smaller
in England than in several states of the Continent, or even
in Ireland. Such proportion, also, is not perhaps materially
greater now than at former periods, when our national
capital, our population, and our public .revenue, were all
far below their present amount. However this may be, it
is not less the duty of government to aid individual accu-
mulation by diminishing our expenditure, since the weight
of taxation must be more severely felt in proportion as the
money-income derived from agriculture, trade, and maim-
[122] Agricultural Report of 1821. [Apr.
factures, shall undergo a diminution. This has been the
case of late -years : the pressure of taxation has been in-
creased in proportion to the rise of our currency ; and no
exertion should be spared to reduce that pressure, as nearly
as possible, in the degree in which it has been augmented.
All taxes tend, in the opinion of the Committee, to
abridge the resources and comforts of those by whom they
are ultimately paid : but no grounds seem to exist for be-
lieving that the profits of farming are more affected by
taxation than those of trade or manufacture. Were such
the case, it must obviously be temporary, since capital would
be changed from one mode of employment to another, until
the proper level were restored. In some of the petitions
referred to the Committee, the parties have gone so far as
to allege that, to remunerate the grower, the price of corn
ought to increase in the same ratio as the public revenue.
Without denying that the cost of raising corn may be in
some degree affected by an addition to our taxes, and that
any increase of the charges more particularly paid by the
farmer, (such as tithe and poor-rate,) must tend more di-
rectly to augment that expence, it is obvious that the price
of corn in every country is regulated " by the cost of til-
lage on inferior soils." Thus no direct connection subsists
between the expenditure of the farmer and the amount of
taxation. The latter might be increased and the price of
corn might fall in a country, if the quantity required could
be raised on the same soils at a reduced expence, in conse-
quence of improvements in husbandry. In the three wars
of the last century, begun respectively in 1740, 1756, and
1775, no rise appears to have taken place in corn: in the
last, prices were even somewhat lower than in the preceding
peace ; though there never was a period when the burden
of taxation seemed to press more heavily on our resources, or
gave greater reason to apprehend that a part of that burden
was paid not from our income but from our capital. During
the late wars, on the contrary, great as was the increase of
our taxation, the number of extensive undertakings begun
and completed by individuals afford a proof that the increase
of the capital of the country must have been progressive
and considerable.
Proposed Duty .of 40s. oil Foreign Wheat. — A fixed duty
to so great an amount as 405. could be considered in no
other light than as a prohibition ; for, during the enforce-
ment in former years of the duty of 24s. 3rf., no importation
took place to any extent. Heavy duties on the smaller
articles of agricultural produce are all open to the same ob-
AIT.] Agricultural Report of 1821. [123]
jcctioii: they would go far towards the total annihilation of
commercial intercourse, unil would probably never have been
proposed to parliament, had not a very exaggerated notion
existed of what is deemed protection to our manufactures.
One witness, to illustrate his argument, furnished a table of
the high custom-duties payable on foreign manufacture ;
without adding that, in most of these, (for instance, in the
article of glass,) the custom duty is intended to countervail
the excise-duty paid on British manufactures of the same
kind. In fact, it may well be doubted whether any of our
principal manufactures, except silk, derive benefit from the
enactments in the statute-book: — if we can afford to un-
der-sell foreign manufactures of cotton, hardware, and even
of woollen, in foreign markets, how could they successfully
compete with us in our own ?
Warehousing of Foreign Corn. — Several of the petitioners
have called for a repeal of that clause in the act of IS 15,.
which allows foreign corn to be lodged in our warehouses
at any time, whether it can then be taken out for home-
consumption or not. In support of their plea, they urge
two arguments : first that foreign corn thus absorbs capital
which would otherwise be employed in purchasing corn of
British growth ; and, secondly, that the notoriety of a
quantity of foreign wheat being deposited in our warehouses
tends to keep the market in a depressed state, from a dread
of its being poured in for sale as soon as prices rise above
80s. Of these arguments, the former evidently is erroneous ;
since no fixed amount of capital is appropriated to the trade
in foreign corn, nor does the value of all the foreign corn
at present in this country exceed 1,000, GOO/, sterling.
As to the second objection, it is unquestionably true that
the present accumulation of foreign corn would have a con-
siderable influence over prices here, on its being admitted
to sale in the event of a deficient harvest : but would not
that influence be nearly or altogether the same, if the accu-
mulation took place in the ports of Holland, Flanders, or
other parts of the Continent, several of which are as con-
venient as our own for access to the Thames. Besides, the
warehousing of foreign corn in England gives us some de-
gree of independence in the supply of our wants; lessening,
in a season of scarcity, the power of foreign states to im-
pose a duty or a prohibition on exports to this country : a
measure by no means unlikely, since a large demand from
England creates an increase of price, frequently injurious
and always unpopular, in the country from which it is sup-
plied. During the memorable scarcity of 1800 and 1801,
[124] Agricultural Report of 1821. [App.
the Prussian government imposed a tax of 1 05. per quarter
on corn exported ; declaring expressly that its continuance
or removal should depend on the continuance or cessation
of our wants.
Conclusion. — It would have been highly satisfactory to
the Committee to terminate their labours by pointing out
some immediate measure of alleviation ; and, could such an
expedient have been suggested, they would not have been
restrained from adopting it though it formed a temporary
departure from sound principles of general policy. When,
however, after an anxious inquiry, they are unable to dis-
cover any means of immediate relief, they know too well
their duty to the House, and respect too much the manly
character of the agriculturists, to recommend any mode of
relief pointed out by the suffering parties, if it appear to be
founded in delusion. As far as the present low prices are
the result of abundance of home-growth, no legislative pro-
vision can raise the market : as far as they proceed from
the increased value of money, they are not peculiar to the
farmer, but common to him with many other classes. In
his case, however, the effect of the latter cause has been
aggravated by its coincidence with an over-stock of supply ;
and by the comparative slowness with which charges, par-
ticularly the rate of labour, accommodate themselves to a
change in the value of money. A rise in such value bears
hard on a tenant farming with a borrowed capital, and under
the engagements of a lease ; as also on the land-owner
whose estate is incumbered with mortgages, or other fixed
payments. Relief, the Committee hope, will ere long be
found in a partial reduction of the rate of interest of money,
now that public loans have ceased; that accumulations of
capital in the hands of individuals are probable; and that
the sinking fund bids fair to have a steady operation on our
public debt. Such an alleviation has been produced in for-
mer intervals of peace ; and if at present the want of it has
become more urgent, the salutary result will, it is to be
hoped, be more speedily effected. The Committee look to
it with the more anxiety, because, amid all the injury and
injustice which an unsettled currency (an evil, they trust,
never again to be incurred) has in succession cast on the
different ranks of society, the share of that evil which has
now fallen on the landed interest admits of no other relief.
Our difficulties, great as they unfortunately are, must dimi-
nish in proportion as contracts, prices, and labour, adjust
themselves to the present value of money: a change which
is now in progress ; and which, the Committee are satisfied,
APP.] Agricultural Ifrjwf of 1821. [125]
will continue until the restoration of that balance whirh
shall afford to labour its due remuneration, to capital its fail-
return.
Such is the Report of the Agricultural Committee, in
our abstract of which, if we have found it occasionally ne-
cessary to transpose the arrangement of the arguments, we
have made it a rule to adhere strictly to the sense, and, as
much as we could, to the words of the original. The
principal inferences from it are :
That the bounty- system, whatever might be its early
operation, had the effect of keeping agriculture in a torpid
state for the half century previous to 1773 :
That the high import-limit established since 1815 has
tended to excess of home-growth ; and
That the prosperity of our agriculture is to be sought in
that comparative exemption from interference which pre-
vailed from 1773 to 1814.
The advice of the Committee is to return, by cautious
steps, to this unrestricted state of intercourse ; reducing
our import limit; and substituting a duty of such an amount
as may afford protection to the present cultivators of our
inferior soils, but holding out no encouragement for the
farther appropriation of these ungrateful occupancies. After
this return to sound principle, the Committee hope that
our increasing population, and the general improvement
of circumstances attendant on confirmed peace, will relieve
the distress of our agriculturists : but they anticipate no
permanent aid from such measures as the imposition of the
proposed high duty (40s. per quarter) on foreign wheat, or
from a restriction on the warehousing of foreign corn in
our sea-ports. The former would lead to an excess of
home-growth; and the latter would merely transfer the
deposits of the corn-merchants from our warehouses to
those of Holland, Flanders, and other parts of the Conti-
nent which are convenient for shipping it to London.
To the general spirit of the doctrines of the Report we
subscribe, in common with all who acknowledge the prin-
ciples of free trade, and who lament that our legislature
has deviated from them so materially in the case of our
corn-laws. The manner of expressing an opinion is a con-
sideration of great nicety in an official report; in which,
far different from the unauthorized publication of an indi-
vidual, confidence of tone may lead to serious results. In
the present case, it was of great importance to avoid all
assertions which might be construed into interference be-
[126] Agricultural Report of 1 821. [ APP.
tween landlord and tenant ; into a discouragement of the
continuance of tillage at its present extent ; or, finally, into
a protection of the consumer at the expence of the agri-
culturist. Against all this' the Committee have carefully
guarded; enjoining nothing with respect to a point so de-
licate as the adjustment of wages or rent to the reduced
price of corn, but leaving the change to the natural course
of circumstances. In like manner, with regard to our
import-limit for foreign corn, while a modification of its
amount and the introduction of a fixed duty are suggested,
we meet with no confident calculation or authoritative pre-
scription as to the rate of either. In short, the Report
is calculated to awaken the landed interest to the folly of
the present system ; and to the injurious tendency of those ,
interferences, to which, formerly in the shape of bounty,
and lately in that of discouragement to import, they have
clung ; — less, we believe, from selfish calculation than
from a credulous acceptance of the professions of ministers ;
who, in a former as in the present age, perfectly knew how
to gild the pill of taxation, and to persuade both agricul-
turist and manufacturer to submit to a sacrifice by holding
forth an ostensible equivalent.
If, on the whole, however, we think thus favourably of
the Report of the Agricultural Committee, we are by no
means blind to its defects : — to the omission of several
topics, and to the imperfect illustration of others.
We have already noticed in the text (p. 155.) the omission
by the Committee of the grand argument, that the cost of
raising corn has a tendency to fall with the fall of the
market; and we have mentioned (p. 146.) our dissent from
the opinion of the Committee, that increase of population
augmented the difficulty of providing subsistence. In fact
the chief defect of the Report arises from the belief that the
•cultivation of an additional surface becomes necessary in
proportion to the increase of our numbers. So much do
the Committee appear to have taken this for granted, that
they addressed very few questions to the witnesses on the
practicability of augmenting the produce of cultivated land
by additional labour : nor do they appear to have remarked
how insignificant have been our inclosures since the peace
in comparison with the increase of our growth. We, on
the other hand, account the effect of labour in augmenting
produce so great, the connexion between the hands which
raise and the mouths which consume, so direct, that in an
attempt to calculate the relative productiveness of different
countries, we should be guided chiefly by the returns of
APP.] ./»;7n//////Y// /iVyw/i-/ <>f IS'-M. [127]
population. Almost every part of Europe raises subsistence
enough for its inhabitants, with the exception of the mari-
time tracts of the Dutch provinces, or rather of the single.
province of Holland, which happens to have both an un-
usually large population, and a soil less adapted to tillage
than pasture.
The Committee have allowed this theory to influence
their reasoning in several material points, such as (p. 10.)
the question of a remunerating price; the extent (p. 11.) of
our probable suffering after a deficient harvest; the argument
(p. 24-.) against a high protecting duty. It may, in short,
be said, that the effect of this impression is almost as per-
ceptible in their labours as was in those of the Bullion
Committee the notion that the Bank possessed the power of
keeping an undue quantity of paper in circulation. — These
drawbacks on the merit of the Report are neither few nor in-
considerable : they do not, however, prevent us from rank-
ing it among the most important and instructive documents
of the kind that have appeared for many years,
Our late Corn-Law. — The Committee have very justly
stigmatised the corn-law of 1815 as adverse to the connexion
which it is our interest to keep up with the Continent, for
the purpose of meeting our occasional deficiencies. Far
from inducing our capitalists to purchase foreign corn,
when it was cheap and abundant, that law discouraged all
intercourse with our neighbours, except in years which, in
consequence of the similarity of latitude and climate, were
likely to be seasons of dearth with them as with us.
The foreigner was thus prevented from buying our manu-
factures, at least from reckoning with any confidence on his
means of payment. Hence the advantage of the Act of the
present year, which, imperfect as it is, opens a prospect of
eventual intercourse with our neighbours, and of lessening
the extremes of rise and fall in our market.
[123]
Corn- Law of the present Session, ordered to be
printed, 20th June,
Abstract. — The Corn-Law of 1815 permitted import
free of duty, whenever our own corn, as returned by the
averages, was at or above
Per Quarter. Per Quarter.
Wheat - 805. I Barley - ' - - 405.
Rye, Pease, and Beans, 535. | Oats - 265.
When our currency was below these prices, the import
was prohibited.
The present act repeals that of 1815, and permits the
import for home consumption of foreign corn, whenever
our own corn shall be at or above
Wheat - - 705. I Barley - - - 355.
Rye, Pease, and Beans 465. j Oats - 255.
subject to certain duties, the amount of which is regu-
lated not by these prices, but by the following table :
SCHEDULE (A.)
Foreign Corn.
Wheat.
Rye, Pease,
and Beans.
Barley,
Bear or Bigg
Oats.
If the average of British
Corn be under, per
Quarter
80s. - -
53s. - -
4Os. - -
28s.
High Duty
- 12*.
- - 8s.
- - 6s.
- - 4s.
If at or above, per Quar
ter
80s. - -
53s. - -
40s. - -
28s.
But under, - do.
85s. - -
56s. - -
42s. 6d. -
30s.
First Low Duty
- - 5s.
- 3s. 6d.
- 2s. 6d.
- - 2s.
If at or above, per Quar-
ter
85s. - -
55s. - -
42s. 6d. -
3Os.
Second Low Duty
- - Is.
- - 8d.
- - 6d.
- - 4d. '
App.]
Corn-Law of June, 1822.
[129]
Colonial Corn. — Corn from Quebec, or our other North
American colonies, is admitted to consumption in tin-.
country whenever our own averages are at or above
Wheat - 59s. I Barley - - - 305.
Rye, Pease, and Beans Ms. \ Oats - 20s.
At the following duties :
SCHEDULE (B.)
Wheat.
Rye, Pease,
and Beans.
Barley,
Bear or Bigg
Oats.
If British corn be under,
per Quarter -
High Duty
67s. - -
- - 1 2s.
44s. - -
- - 8s.
33s. - -
- - 6s.
22s. 6d.
- - 4s.
If at or above, per Quar-
ter
But under, per Quarter
First Low Duty
If at or above, per Quar-
ter -
Second Low Duty
67s. - -
71s. - -
- - 5s.
71s. - -
- - Is.
44s. - -
46s. - -
- 3s. 6d.
46s. - -
- - 8d
33s. - -
35s. 6d. -
- 2s. 6d.
35s. - -
- - 8d.
22s. 6d.
24s.
- - 2s.
24s.
- - 4d.
Additional Duty for the first three Months aftei* Admission
to sale for Home Consumption. — To prevent an abrupt im-
port, or lowering of the market, it has been judged advise-
able to impose by the present act an additional duty on
Wheat - 55. Od. I Barley - - - 2s. 6d.
Rye, Pease, and Beans 3s. 6d. \ Oats - - - 2s. Od.
On all corn, colonial as well as foreign, payable in addition
to those in the Schedules, during the first three months of
admission to home consumption, whether the corn be taken
from the warehouse or from on board of ship.
Corn in Warehouse. — Foreign or colonial corn at present
in warehouse may be taken out and sold for home con-
sumption, as soon as> our averages shall be at or above the
preceding rates respectively, of 70s. for foreign, 59s. for
colonial wheat, &c., but subject to the highest duty in the
Schedules A. and B. And
j Corn at present in warehouse may be admitted to home
consumption in conformity with the Acjt of 1815, that is
free of duty, whenever our averages rise to the rates fixed;
in that Act, viz.
Wheat - 80s. I Barley - 40s.
Rye, Pease, and Beans 53s. ] Oats - - 26s.
[130]
Corn-Law of June, 1822.
[Apr.
Flour, whether of wheat or oats, is subject to duties
proportioned to the above-mentioned duties on grain. In
this respect also our North American colonies have a pre-
ference, which to them is a point of considerable import-
ance, since the shipments on the opposite shore of the
Atlantic take place more frequently in the shape of flour
han of grain.
Flour made from wheat,
The high duty
First low duty
High duty
First low duty -
Per cwt.
3s. 3d.
Is. 7d.
Per cwt.
Additional during the
first three months Is. Id.
Second low duty 05. kd.
Oatmeal per boll :
- 45. Wd.
- 25. 2d.
Additional for first
three months - 25. 2/7.
Second low duty 05. 6d.
THE END.
LOKDON :
Printed by A. & R. Spottiswoodc,
New-Street- Square.
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